Integrated Report

IR BOOK

2023

Link and Motivation Grouphttps://www.lmi.ne.jp/english/

Creating a More
Meaningful Society

Introduction?

What Do We Mean by
a “More Meaningful Society”?

IR BOOK 2023

Intro duc ti o n

In Japan, a country with few natural
resources, we will realize a society where
people can truly thrive as the greatest,
most powerful type of capital.
Through the OpenWork service, we want tomake all kinds of information about working
available to help achieve a society based on
mutual selection.
We bring out each organization’s unique

We help make everyone in thequalities to raise the presence of Japaneseclassroom setting more confident in“The kind of society we want”

companies in the capital market.

their abilities in order to foster more
dynamic lives in the future.

IR BOOK 2023

Helping each individual discover theabundance of meaning that lies beyond

By improving our customers’

Introduction

material wealth
We aim to create a future where organizations and individuals use their dreams andskills, we expand their choices andsense of purpose to draw forth deeper meaning from society.

create a more meaningful society.
We develop unrivalled
By developing essential intangibles into

products for transforming

technologies, we help create a society in

our customers’ organizations.

which as many people as possible canlive a happy life.

We are committed to using Motivation
Engineering to create a society where children
can feel free to share their dreams with others.

Organizational
Development

Support for creating organizations that
individuals choose (Motivation Companies)

Matching
Providing opportunities to link

“This is what we must do to createa more meaningful society.”organizations and individuals

opportunities for transformation to resolve

Based on Motivation Engineering, our core technology, we operate three divisions in thefields of organizational development, individual development and matching. Our goal isto provide opportunities for transforming organizations and individuals.

Support for creating individuals thatorganizations choose (i-Companies)

Individual
Development

Introduction

their problems and realize their wishes

IR BOOK 2023

Providing organizations and individuals with

4
Message from the Chairman

Chairman and Representative Director
Link and Motivation Inc.

Introduction

Ozasa Yoshihisa

IR BOOK 2023

Expanding the Concept of a“More Meaningful Society”
through Motivation Engineering,
Our Core Technology

5
Message from the Chairman
Watch the video version of this message here. (Available in Japanese only)

What Is the “More Meaningful Society” We Aim For?

organizational and individual transformations we produce. In addition,
Motivation Engineering is driven by diagnostic and transformation

What kind of society is a “more meaningful society”? It may be difficult totechnologies. We go beyond simple diagnostics to support a wide range ofenvision. Suppose, for instance, the Earth were five minutes away fromorganizations and individuals in achieving transformation, improvement

being destroyed. In that case, the question would have no meaning forand growth based on the results of our diagnosis. Link and Motivation is

this current message, or for you reading this. Paradoxically, one could say

the only company that can provide this one-stop service, which wethat a meaningful society is one where the future remains open, andconsider our unique advantage.

future because of their dreams and sense of purpose. This is theGoing Forward“more meaningful society” we aim to create.
I feel that the times have finally caught up

ground between a company’s management philosophy and mission andwith the confident prediction I made when

the ambitions and goals of its employees. This leads to a strong sense offounding Link and Motivation about theempathy toward work—in other words, a high level of engagement. For

coming importance of corporate investment inindividuals, it means working to improve their skills to achieve their

human capital.

ambitions and goals and feeling a sense of purpose in life and work. Thisis the society we aim for.

I am also confident that our core Motivation
Engineering technology is applicable notjust in Japan but worldwide. I see a path

Our Advantage

opening up before us to further broaden
our influence as we continue to refine andMotivation Engineering, which is our core technology, is our greatest

upgrade Motivation Engineering. The Link

strength. It brings together academic findings in areas including businessand Motivation Group will follow this path

administration, behavioral economics, social systems theory and psychology.

without hesitation to expand the concept

Motivation Engineering ensures the practicality and reproducibility of theof a “more meaningful society.”

Introduction

In more specific terms, for an organization, it means having common

IR BOOK 2023

where organizations and individuals are excited about this open6
Contents
Key Points of IR Book 2023
Based on valuable feedback from shareholders and institutional investors, we have focused on our strategies for medium- to long-term growth and on Motivation Engineering, which is ourcore technology and the Link and Motivation Group’s competitive advantage. We have also expanded the overview of all six businesses and included more information on sustainability.

Chapter 3

Introduction
What Do We Mean by a “More Meaningful Society”?

1

Message from the Chairman

4

The Link and Motivation Group at a Glance

7

Overview of Businesses& Cloud BusinessCorporate Data

28

29

Individual Development Division: Career School

A History of Creating Value

9

Value Creation Process

10

Close-Up: What Is Motivation Engineering?

11

Growth Strategy Centered on
the Consulting & Cloud BusinessMessage from the President

15

Medium-Term Growth Strategy

16

Perception of the Operating Environment

17Competitive Advantages

18

Growth Potential

19

Approach to Growth20

Increasing Recurring Revenue

21

Increasing One-Time Revenue per Customer

22

Message from the Director in Charge of

23

Close-Up: Motivation Engineering as Used in the

24

48

Revenues by Business/Other Business-Related Data

49

Consolidated Statements of Financial Position

50

Consolidated Statements of Operations and Comprehensive Income

51

Consolidated Statements of Cash Flow

52

Company Profile

53

30

Individual Development Division: Cram School

31

Overview of the Link and Motivation Group’s Information Disclosure

Matching Division: ALT Placement Business

32

Matching Division: Personnel Placement Business

33

The Link and Motivation Group (“LMG”) communicates with its stakeholders
using diverse tools to disseminate information from a variety of perspectives.

Group Organizational Strategy

34

Human Resource Capabilities: Role Survey Scores

35

BusinessEngagement: Engagement Ratings

36

Productivity

37

Recruiting, Training, Systems and Corporate Culture 38

Chapter 4Foundation for Realizing Our Mission
Message from the CFO

40

A Management Structure That Supports Sustainable
Growth: Corporate Governance
Board Members and Executives

41
42

A Management Structure That Supports Sustainable
Growth: Risk Management
Approach to Human Rights

43
44

Approach to Diversity, Equity and Inclusion/
Approach to Environmental Management

45

Content
Form of Disclosure
IR Book(Integrated
Report)Contains information on LMG’s management
strategies, business activities and ESG initiatives,with the aim of deepening overall understandingof the economic and social value created by LMG

Human Capital
ReportCovers LMG’s approach to human capital management
and results

Pursuant to Japan’s Financial Instruments andExchange Act, the report contains a company
Securities Report overview, business condition and financial(Japanese only) information such as financial statements, as well
as non-financial information on the corporate
governance system and other topics

Financial
Statements

Financial Non-financial
Information Information

●

●

●

●

Contains quarterly financial information●

Shareholder
Report(Japanese only)

Provides an overview of LMG’s businesses, information
on its human resources and other topics in addition
to the Group’s business results to help deepen
shareholder understanding●

Corporate
Governance
Report(Japanese only)

Contains information on LMG’s corporate governancepursuant to the listing regulations of the Tokyo
Stock Exchange

●

●

●

Introduction

Chapter 2

Business

Key Financial Indicators

IR BOOK 2023

Business

47

Performance, Financial Position and Dividends

27

Organizational Development Division: IR Support

The Link and Motivation Group’s
Value Creation

Consulting & Cloud BusinessBusinesses and Organizations of
the Link and Motivation Group
Organizational Development Division: Consulting

Chapter 1

the Organizational Development Division

Chapter 5

7
The Link and Motivation Group at a Glance

Consolidated Financial Results
2023
Revenues:

Revenues:

Gross profit:

billionbillionMotivation Cloud Market Sharefor Six Consecutive Years

Operating income:¥4.6

Organizational
Development Division

Individual
Development Division

Support for creatingorganizations that
individuals choose(Motivation Companies)

Support for creating
individuals thatorganizations choose(i-Companies)

Consulting & Cloud Business

Career School Business

IR Support Business

Cram School BusinessbillionRevenues:

Employee engagement market: Sales volume
forecast)

billion

Employees:

Career School Business Customer
Satisfaction (Scale of 5)*

4.07
Matching Division

Resources Management Market 2023
and share by vendor (fiscal 2017 to fiscal 2022

billionGross profit:

No. 1** Source: ITR Corporation, ITR Market View: Human

¥6.4
¥2.9
524

Providing opportunities to linkorganizations and individuals
ALT Placement Business
Personnel Placement
Business

Revenues:

¥15.3
¥6.3
322

Gross profit:

Employees:* Survey conducted in November 2023

billionbillionOne of Japan’s Largest
Databases of Employee Reviews
and Evaluation Scores

16.2

million (cumulative)

Introduction

Employees:

billionIR BOOK 2023

¥12.8
¥9.0
622

¥33.9

1
Chapter

The Link and Motivation Group’s
Value Creation
A History of Creating Value

9

Value Creation Process

10

Close-Up: What Is Motivation Engineering?

11

9

The Link and Motivation Group’s Value Creation

A History of Creating Value

When Link and Motivation was founded, the English word “motivation” was still largely unknown
in Japan. We were a forerunner in recognizing the importance of motivation as we pioneered thisnew era, in which human capital management has at last come to the fore.
Social BackgroundRamping up a fundamental
transformation in humanresources to bolster Japan’snational standing

2012
Start of Abenomics by the Abe administration (1) Aggressive monetary policy(2) Flexible fiscal policy(3) Growth strategy to stimulate private investment

2000

2005

2014
Publication of the Ito Report Calls for improvement in long-term corporate
value through ongoing dialogue and for ROE
of 8% or higher

2010

2015

2020
Global COVID-19 pandemic
Publication of Ito Report for
Human Capital Management

A pioneer in developing new
businesses related to organizations
and human resources

Publication of Guidance for Collaborative Value
Creation 2.0

2023

2010
Entered the individual
development field

2018

First in Asia to obtain ISO 30414
certification

First in Japan to disclose
engagement ratings

Moved to the Prime Market of the Tokyo
Stock Exchange

2016

2007
Stock listed on the Second Section of theTokyo Stock Exchange
Moved to the First Section in 2008

Entered the HR Tech field
Launched Motivation Cloud, Japan’s firstcloud-based service for improving engagement

Main Registered Trademarks in Japan
2002

2003

2017

Entry Management

i-Company

Strategic HR

2019Engagement Score
Engagement Rating
Portable Skill

Chapter 1

Ascent of Link and Motivation

2022
Publication of Ito Report for Human CapitalManagement 2.0

2022

Entered thematching field

Founded as the world’s first
consulting company focusing
on motivation

Disclosure of human capital
information becomes mandatory
in securities reports

2020

2012

2000

2023
Kishida administration steps up
initiatives for “new capitalism”

IR BOOK 2023

2008
Global financial crisis Stock price declines, financial
instability and recessions worldwide

2019
Government-led promotion of work style reform

10

The Link and Motivation Group’s Value Creation

Value Creation Process

The type of management capital that the Link and Motivation Group emphasizes most is humancapital. Creating value together with stakeholders through a business model that fully utilizes ourcore technology of Motivation Engineering will lead to a more meaningful society.
Changes in the
Operating Environment

Main Types of Management CapitalBusiness Activities

Value Created

Organizational strategies
to maximize human capitalBusiness strategies tomaximize customer value

Creating value together
with our stakeholders

Pages 34-38

Pages 27-33(decrease in the working
population)

Employees(business shift fromproducts to services)

Growing momentum
for human capitalmanagement

Engagement Ratings

Rank of AA or higher

8 out of 8
companies

Motivation
Engineering

Individual
Development
Division

Reproducibility

Rank of A or higher
Managers: 73.1%
All employees: 55.4%

Individual Development Division
Average number of enrollees
during the past 12 months

14,516

Average number of ALTs
dispatched during thepast 12 months

Role Survey Scores

Diversification ofwork motivation

Approx.1,500

Number of companies that
disclose Motivation Cloud
diagnosis results

116

Source of our uniqueness andcompetitive advantages

Practicality

Number of corporate customers

2,866

Matching
Division

Number of OpenWork
registered users

6.05 million

Intellectual capital(cumulative)

Number of corporate customers
for OpenWork Recruiting

2,830

Social capital

Note: As of December 31, 2023

Value Creation Platform

Pages 40-45

A MoreMeaningfulSociety
Pages 1-5

Chapter 1

Changes inindustrial structure

Pages 15-25
Organizational
Development
Division

Human capital

1,470

IR BOOK 2023

Consulting & Cloud Business

Financial capital
Changes indemographics

Our Vision for Society

11

The Link and Motivation Group’s Value Creation

Close-Up: What Is Motivation Engineering?
Motivation Engineering is the core technology of the Link and Motivation Group. Based on a wide range of academic findings, it underpins all the Group’s businesses.
Since our founding as a consulting company, we have developed Motivation Engineering with a deep commitment to continuously improving the practicality and reproducibility of its
results, enabling us to roll out businesses in other fields such as the BtoC business and matching.
We will continue our collaboration with academic institutions to regularly update this technology and upgrade our products and services.

Regularly Updated and Utilized in Solutions(Businesses in Each Division)

Academic Findings

Social systemtheoryPsychology

Philosophy

Linguistics

Biology

Educationand others

Organizational
Development

Individual
Development

Chapter 1

Behavioral
economics

Applications in Business

Motivation
Engineering
Matching

Reproducibility

Collaboration with Academic Institutions(Motivation Engineering Institute and Edgeson Management Association)

IR BOOK 2023

Business
administration

Practicality

12

The Link and Motivation Group’s Value Creation

Close-Up: The Approach Underlying the Link and Motivation Group’s Business Creation
Motivation Engineering is premised on two basic approaches: a perspective of humans and a perspective of organizations.
The perspective of humans is based mainly on psychology, and views humans as emotional beings with limits to their rationality. The perspective of organizations is based mainly on social
systems theory and behavioral economics, and views an organization as a cooperative system.
Designing all of our products and services in accordance with this unique approach gives them high levels of practicality and reproducibility.

Humans are not completely driven by economic rationality.
They are emotional beings with limits to their rationality.

An organization is a cooperative system that is
not reducible to its constituent elements.

It is important to design opportunities that offer not only
financial rewards but also emotional rewards.

It is important to reduce complexity by understanding thatproblems are not in the people but in the gaps between them.
Example: Five-person organization

Emotional Rewards

Financial Rewards

Desire for recognition

Money/Position＋e.g., awards for
performance

Desire for growthe.g., improvement in
know-how and technique

Desire for contribution

C

B

B

A

e.g., words of thanks

Desire for fellowship

Cooperative systemamong A through E

A+B+C+D+E

D

A
E

E
C

D

e.g., good teamwork

Communication Is the Lifeblood of an Organization

See page 24 for specific examples from the Consulting & Cloud Business.

Chapter 1

Perspective of Organizations

IR BOOK 2023

Perspective of Humans

13

The Link and Motivation Group’s Value Creation

Close-Up: Constituent Technologies of Motivation Engineering—Common Types across Business Fields
Motivation Engineering is driven by diagnostic and transformation technologies. Diagnostic technologies use our unique frameworks to identify customer problems, and the database onorganizations and individuals that we have built up since our founding is one of the largest in Japan. Transformation technologies use our accumulated insights to resolve the problems we
identify, and our ability to provide one-stop support for organizational and individual transformation is a distinctive feature.

Applications across the Link and Motivation Group’s Business Fields
Diagnostic Technologies
Visualization of engagement

Organizational diagnostic data

Transformation Technologies
One-stop support for improving engagement

For
Organizations

11,360 corporate

diagnoses

Visualization of skills and motivation types
Individual diagnostic data

For
Individuals

Training

Systems

Corporate Culture

Strategic design,raising operational
efficiency andimproving recruiting
capabilities

Training by rank (newuniversity graduates,
mid-career employees,
managers andexecutives) andtraining by theme

Personnel systemdesignGeneral meetings of
employees andanniversary events

One-stop support from education/examinations and finding
employment to changing jobs

720,000 people
Individual diagnosis covers motivation
type and skills as well as learning level topresent the optimal plan for each enrollee.

Examinations

Finding Employment

Changing Jobs

Operation of SS-1, a private
instruction school for elementary
school students, and Motivation
Academia, a cram school forjunior high and high school
students

Placement support for new
university graduates throughcareer advisors

Direct recruiting service
using OpenWork andplacement support
through career advisors

Chapter 1

For organizational diagnosis, we use
Motivation Cloud to identify the locationand nature of issues in each organizationand visualize the state of engagement.

Recruiting

IR BOOK 2023

Approx. 4.03 million
respondents in

2
Chapter

Growth Strategy Centered on theConsulting & Cloud BusinessMessage from the President

15

Medium-Term Growth Strategy

16

Perception of the Operating Environment

17Competitive Advantages

18

Growth Potential

19

Approach to Growth20

Increasing Recurring Revenue

21

Increasing One-Time Revenue per Customer

22

Message from the Director in Charge of theOrganizational Development Division
Close-Up: Motivation Engineering as Used in theConsulting & Cloud Business

23
24

Growth Strategy Centered on the Consulting & Cloud Business15

Message from the President

We are allocating management
capital to the Consulting &Cloud Business to fulfill our
mission.
Sakashita Hideki

I have been involved in organizational and personnel consulting since
Link and Motivation was founded, and I feel that this field is on the vergeof an unprecedented wave of change. Momentum for the promotion ofhuman capital management is also increasing as disclosure of humancapital information in securities reports becomes mandatory, among
other factors. It is clear to me that companies will be forced to makefundamental changes.
Specifically, it is becoming progressively harder for a company to remain
the choice of its employees and job applicants. This is the result ofintensifying competition for capable human resources due to factors
including a decline in the working population, a business shift fromproducts to services, diversifying motivation toward work, and technologicaladvances in AI. As a prerequisite for sustainably creating value, companies
must make a meaningful effort to confront two issues—improving humanUnder these circumstances, our current policy is to focus on the
Organizational Development Division’s Consulting & Cloud Business,
which has high growth potential. The number of companies the Consulting &Cloud Business supports has grown to approximately 1,500 in Japan, but
considering that some 100,000 domestic companies have 50 or more
employees, we see ample room for further expansion. The preeminence of
the Link and Motivation Group’s Consulting & Cloud Business stems fromits ability to provide comprehensive support for human capitalmanagement throughout a cycle of identifying issues through diagnosis,
transformation of those issues, and disclosure of the results of thetransformation—all based on our core Motivation Engineering technology
and vast amount of accumulated data and insights. Through support for
the transformation of major domestic companies, our initial target, wewant to play a role in returning Japan to its position as a global leader. We
will also offer value worldwide by working to introduce our services at theoverseas subsidiaries of global Japanese corporations, starting in Asia,
where a rollout is already underway.
Finally, to bring about these changes, the Link and Motivation Group
must demonstrate its own leadership in human capital management. We
will continue to practice what we preach in order to capitalize on thecurrent advantageous conditions and achieve dramatic growth.

Chapter 2

A Time of Fundamental Corporate Change Driven bya Changing Labor Market

A Thorough Focus on the Consulting & Cloud Business,
Our Growth Driver

IR BOOK 2023

President and Representative Director
Link and Motivation Inc.

resource capabilities so that current employees can perform at their best,and improving engagement to retain and acquire human resources. When
talking with senior management of leading companies, I find that many now
consider human resources to be a core management issue, which is a dramaticdifference from when Link and Motivation was founded.

16

Growth Strategy Centered on the Consulting & Cloud BusinessMedium-Term Growth Strategy

We are currently focusing on the Organizational Development Division’s Consulting & CloudBusiness, which has high growth potential, and working to expand the Motivation Cloud
series as the foundation for substantial ongoing growth.

2024 Forecast
Organizational Development Division

Consulting & Cloud Business
IR Support Business

Career School Business
Cram School Business

Revenues¥15.0

Gross Profit

billion+16.4% YoY¥10.6

Monthly Fee Revenue

billion+17.3% YoY¥530

million+24.0% YoY

Progress toward Target

Matching Division
ALT Placement Business
Personnel Placement Business

Consulting & Cloud Business Outstanding Orders*(¥ million)

12,000

9,000

6,000

3,000
0

2023
and
after

2022

2024
and
after

2025
and
after

Orders already obtained for2024 projects

Approx.
2023

2024

Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023

¥7.0 billion(Approx. +16% YoY)
* Total amount of orders for future projects obtained at a given
point in time. Figures in the graph indicate the timing of delivery.

Chapter 2

Individual
Development
Division

IR BOOK 2023

Organizational
Development
Division

Motivation Cloud Series

17

Growth Strategy Centered on the Consulting & Cloud Business

Perception of the Operating Environment

Remaining the choice of employees and job applicants has been increasing in importance anddifficulty for companies, and this trend will continue to accelerate.

Changes in the Operating Environment
Since the 1990s

Since 2020

Growing momentum forhuman capital management(business shift fromproducts to services)

Diversification ofwork motivation

A management approach thatviews human resources as capitaland maximizes their value toimprove corporate value overthe medium to long term

Improving human resource
capabilities
An issue for ensuring thatcurrent employees canperform at their best

Chapter 2(decrease in working
population)

IR BOOK 2023

Changes indemographics

Changes inindustrial structure

Organizational Issues for Companies
Going Forward

Intensifying competition forcapable human resources amid
advances in AI technology

Improving engagement
An issue for retaining andacquiring human resources

18

Growth Strategy Centered on the Consulting & Cloud Business

Competitive Advantages

We demonstrate our superiority in providing comprehensive support for corporate humancapital management through diagnosis, transformation and disclosure based on Motivation
Engineering, the core technology we have cultivated since our founding.
Diagnosis
Rather than simple measurement, we provide a
precise diagnosis of engagement for transformation.
IR BOOK 2023

One of Japan’s largest databases

4.03
11,360Approx.

million respondents incorporate diagnoses

Disclosure
Rather than simply announcing information, we
support enhanced disclosure based on diagnosis
and transformation.

Number of companies that disclose
Motivation Cloud diagnosis results
Reportproduction

Streaming
video

Comprehensive
support for humancapitalmanagement

Chapter 2(As of December 31, 2023)

Transformation
Rather than stand-alone support for training andrecruiting, we provide one-stop
organizational HR consulting.

Recruiting

Training

116

Number of companies supported
during the year
Approx.

880(As of December 31, 2023)(As of December 31, 2023)
Systems

Corporate
Culture19

Growth Strategy Centered on the Consulting & Cloud Business

Growth Potential

We are working to expand sales by focusing on major domestic companies that have substantial
room for development. We will also roll out Motivation Cloud in Asia with a view toward global
expansion.

Rollout of Motivation Cloudin Asia has already begun,
starting at local subsidiaries
of Japanese companies inThailand and Vietnam.

VietnamNumber of corporate
customers of theConsulting & CloudBusiness in 2023
Approx. 1,500* Determined based on 2021 Economic Census for Business Activity from the Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and Industry

Chapter 2

ThailandIR BOOK 2023

Number of domestic
companies with 50 or more
employees*
Approx. 100,000

20Growth Strategy Centered on the Consulting & Cloud BusinessApproach to Growth

By increasing revenue per customer and the number of customers for the Motivation Cloud
series, we aim for growth in recurring (subscription) revenue by continuously providing
products and services premised on long-term use.

Recurring revenue
Number of recurring
revenue customers(1) Increase ratio of major companies with high revenue
per customer(2) Increase cross-selling of Stretch Cloud(3) Diversify earnings through M&As

Focus on sales of Motivation Cloud series

Current cross-selling ratio
Approx. 30%

One-time revenue
Consulting services providing
focused transformation as required
based on diagnosis results

One-time revenue per
customer

Number of one-timerevenue customers

Increase revenue per customer bydeepening customer relationships

See here for more details on Stretch Cloud (Japanese Only)

Chapter 2

Recurring revenue per
customer

IR BOOK 2023

Cloud services providing regulardiagnosis and transformation at the
optimal frequency for each company

21

Growth Strategy Centered on the Consulting & Cloud Business

Increasing Recurring Revenue

In addition to introducing our services at major companies, we will ramp up growth in recurring
revenue by cross-selling Stretch Cloud and diversifying earnings through M&As.

(¥ million)(%)

Recurring Revenue in Consulting & Cloud Business

50

6,000

40

30

Chapter 2

4,459

IR BOOK 2023

5,000

4,000
3,458
3,000

2,696
2,310

20

1,933

2,000
2016 2Q
Began offering
Motivation Cloud

1,184

10

1,000
522
142
0

2016

2017

2018

Recurring revenue (¥1 million or more per customer) (left scale)

2019

2020

2021

2022

2023

Recurring revenue (less than ¥1 million per customer) (left scale)2024(Forecast)0Percentage of total revenues (right scale)

22

Growth Strategy Centered on the Consulting & Cloud Business

Increasing One-Time Revenue per Customer

As business issues become more complex, demand is rapidly increasing for comprehensive support
for organizational and personnel issues. We develop numerous top consultants by leveraging theknowledge we have cultivated since our founding.
Evolution of
governance

Ensuring diverse
work styles andworkforce

Trends insustainability
management

Increasingly Complex Issues

LINK

Organizational
Strategy

Chapter 2

Business
Strategy

As business issues become more complex,
comprehensive human capital management
becomes essential.

We develop numerous top consultants who resolve complex
organizational and personnel issues.

Recruiting•S trengthen recruiting of humanresources with high aptitude for
consulting•M aintain and increase sympathy
with our philosophy

Training• Add new employee training programsfor rapid development of consultants

Systems• Improve compensation for consulting
specialists

IR BOOK 2023

Promotion ofdigitaltransformation(DX)

Technologicalinnovation

Corporate Culture• Introduce a new award system for
projects that demonstrate themost value for customers during
the year23

Growth Strategy Centered on the Consulting & Cloud BusinessMessage from the Director in Charge of the Organizational Development Division

We are leading society bybringing Japan up to speed
in the organizational andpersonnel sector.
Kawauchi Masanao
Managing Director
Link and Motivation Inc.

Driving the Future of Link and Motivation
Motivation Cloud has grown steadily since its launch in 2016 as Japan’s firstcloud-based service for organizational improvement. However, Japan is thought
to lag 10 years behind the United States in the HR Tech field. We must establish
a greater presence as a pioneer in organizational and personnel consulting,and I strongly feel that employees of my generation must be the ones to lead
Link and Motivation in doing so. While treasuring our accomplishments, we willcontinue taking on new challenges as the drivers of further growth with thedetermination to change the world.

Chapter 2

I joined Link and Motivation in 2003 after graduating from university. At thetime, in Japan the word “motivation” was only heard in the field of sports, but
now it is common in corporate management, and the idea that the power ofpeople and organizations is the most important aspect of corporate management
has taken hold throughout society. I take pride in Link and Motivation’s contribution
to this social trend. At the same time, I feel somewhat disconcerted because
we have not yet been able to fundamentally change society at large. Over the
past 20 years, waves of change have swept through the field of human resources
in Japan, bringing in performance-based pay and work style reform. In eachcase, broadly speaking, Japanese companies have struggled to adapt. They
merely copied or applied superficial elements, ignoring the essence of theirobjectives and reasons for changing, and as a result have not truly changed.
No matter how many new technologies and ideas emerge, it is up to people
and organizations to incorporate and utilize them. Now that changes morewidespread and rapid-fire than ever before are bearing down on Japanesecompanies, will their people and organizations be able to change? I feel asense of urgency and responsibility for Japan as it stands at a crossroads.

Link and Motivation’s Consulting & Cloud Business has been growing steadily
by addressing these changes in the operating environment. However, considering
the world we aim to create and the expectations of the market, I believe wemust grow at a faster pace. The Consulting & Cloud Business generates two
types of earnings: recurring revenue, mainly from cloud services that provide
regular diagnosis and transformation at the optimal frequency for eachcompany; and one-time revenue from consulting services that provide focusedtransformation solutions when the diagnosis results uncover issues that cannot
be resolved through the cloud service. Increasing recurring revenue is apressing matter, both to provide ongoing support for resolving corporate
organizational issues, and to reinforce the foundation for achieving substantial
growth. In addition to broadening support for and increasing the number ofcustomers for our services, we will focus on improving total revenue per
customer by increasing the ratio of major companies (with high revenue per
customer), conducting cross-selling among our cloud-based services, anddiversifying earnings through M&As.

IR BOOK 2023

A Sense of Urgency and Responsibility to Adapt Corporate
Management to a Rapidly Changing World

Increasing Recurring Revenue to Maintain Substantial Growth24

Growth Strategy Centered on the Consulting & Cloud Business

Close-Up: Motivation Engineering in the Consulting & Cloud Business
Since our founding, we have developed a wide range of products and services based on academic findings in our Consulting & Cloud Business.
For example, even individual programs used in training are developed with a thorough grounding in academic findings to support a real transformation for customers. In this way, thehigh levels of practicality and reproducibility lead to a high repeat rate.

Humans are not completely driven by economic rationality.
They are emotional beings with limits to their rationality.

An organization is a cooperative system that is not reducible toits constituent elements.

Because people are emotional beings, it is important to take a
step to “unfreeze” them rather than forcing a sudden change.

As it is a collaborative system, problems tend to arise in thegaps between people, such as misunderstandings between
departments. It is important for managers to play the role ofa “junction point” connecting departments.

Example: First part of management training

Example: 360-degree manager survey

Blind Square
All members other than the instructor
are blindfolded and do not knowwhat to do. The instructor then gives
directions to the members so thatthey form a single shape using a rope.

• Facilitates understanding of the different
positions of managers who have objectives,
methods and information, and members
who do not• Hands-on experience that demonstrates
members’ motivation decreases when they
do not know their objective

Psychologist Kurt Lewin: Three-stage model of attitude change
Unfreeze Change Refreeze

360-degree Survey
Supervisors and team members rate
their levels of expectation andsatisfaction for four items requiredof managers: providing information,gathering information, making
decisions, and providing support.

• To visualize the level of relationships oftrust, everyone takes the survey (a coworker version or a supervisor version).
• Items are positioned as points on theupper, lower, left, and right sections of
two axes.
• Co-workers and supervisors attend ameeting to share results

Sociologist Niklas Luhmann: The ultimate function of social systems is
to reduce complexity and build relationships of trust. (paraphrasing)

Chapter 2

Perspective of Organizations

IR BOOK 2023

Perspective of Humans

25

Growth Strategy Centered on the Consulting & Cloud Business

Close-Up: Practicality and Reproducibility of Motivation Engineering in the Consulting & Cloud Business
The Consulting & Cloud Business provides support to approximately 1,500 companies in Japan (as of December 31, 2023), and has received positive feedback from many customers for
its practicality.
We continue working to increase practicality and reproducibility through technological development by the Motivation Engineering Institute.

Corroboration of Practicality

Customer Feedback

Initiatives to Increase Practicality and Reproducibility

Motivation Engineering Institute

In addition to consulting on the indicators we use in disclosure, Link and Motivation also helped us set up
core measures and KPIs, looking ahead to implementation and improvements after disclosure. In short, it
was everything we needed.

Thanks to the support Link and Motivation provided for disclosure in our medium-term management plan,
our price-to-book ratio rose above 1.0. We also received practical support for improving the indicators we
disclosed in areas including revising our personnel system, strengthening management and devising recruiting
strategies, so we are very grateful.

shown to be effective.

Human
We are actively involved in popularizing
Motivation Engineering through methods
resource
development including study sessions held by Chairman Ozasa.
We collaborate with industry, government andTechnology
academia to develop management technologies
development based on Motivation Engineering and to conduct
research studies.

Representative Research2024 Award Winners
Major Companies Category
1st place: SBC Medical Group
Holdings, Inc.
2nd place: Marubeni Corporation

3rd place: T he San-in Godo Bank, Ltd.
The Best Motivation Company Awards are an
event that recognizes companies with highengagement scores. Since we inaugurated theevent in 2011, numerous companies have won
Medium-sized Companies/Startups
awards, demonstrating that they have used「our要素還元論ではなく関係論を前提にすると、5人のチームではなく、10本の関係性のある集団」
Category
services to transform their organizations. Theyという視点が得られます。
組織に向き合う際に「問題は“人”ではなく“間”にあり」という効果的な見also use the award in branding
when conducting
1st place: KOSHO CORPORATION
human
capitalmanagement,
and
we
share
the
方もこのような背景から導かれています。
リンクアンドモチベーショングルー
2nd place: PROGRITプが、Inc. 組織問題の解決
initiatives of award-winning companies in helping
3rd
place:
NorthSand,
Inc.
に
「コミ
ュニケーション」「信頼醸成」などの重要性を啓蒙しているのはこのためです。
to build
organizationsやat other participatingcompanies.

Results of Research on Engagement
and Corporate Performance

Results of Research on Engagement
and Investment Metrics

Joint research with the Iwamoto Laboratory at
Keio University’s Graduate School of Business
Administration showed that the higher acompany’s level of engagement, the higher its
labor productivity and operating margin. These
results are also published in the Report of theStudy Group on Improvement of Sustainable
Corporate Value and Human Capital (known as
the Ito Report for Human Capital Management).

We found that companies with higher engagementscores tend to perform better in terms of the investment
metrics ROE, ROIC and PBR.

Engagement Score (ES) and Operating Margin

Engagement Score (ES) and ROE

Operating Margin

ROE
40%

40%

30%

r＝0.45***

20%

20%

10%
0%

0%
Score
Line of best fit

-20%
30

40

50

60

70

80 ES

Score
Line of best fit

-10%
-20%

35

45

55

65

75 ES

**：p＜0.01 ***：p＜0.001

Source: Link and Motivation Inc., Research Results on Engagement and Corporate Performance and Research Results on the Relationshipbetween Employee Engagement and Investment Metrics

Chapter 2

Best Motivation Company Awards

We focus on developing unique solutions, andProduct
provide customers with new products anddevelopment services that have been tested in-house and

IR BOOK 2023

There really wasn’t any other company in our industry that explained its businesses and organizations fromthe perspective of its corporate philosophy to the extent we did, so I think Link and Motivation helped us
communicate our uniqueness. The experience also served as a reference for how we formulate our policies
for developing human resources and make in-house improvements to our securities report.

The Motivation Engineering Institute develops
management technologies, products and services
through advances in Motivation Engineering,and continues to seek out and deepen insights
by combining academic findings with praxis,
both inside and outside the Company. Our
total commitment to practicality and reproducibility
in product development means that we provide
customers with only those products and services
that have been applied in-house and shown tobe effective.

3
ChapterBusinesses and Organizations of the
Link and Motivation Group
Overview of Businesses

27Organizational Development Division: Consulting & CloudBusiness

28

Organizational Development Division: IR Support Business 29
Individual Development Division: Career School Business30

Individual Development Division: Cram School Business

31

Matching Division: ALT Placement Business

32

Matching Division: Personnel Placement Business

33

Group Organizational Strategy

34

Human Resource Capabilities: Role Survey Scores

35

Engagement: Engagement Ratings

36

Productivity

37

Recruiting, Training, Systems and Corporate Culture

38

27

Businesses and Organizations of the Link and Motivation Group

Overview of Businesses
2023 Business Results
Business Domains
15,398(44.4%)

12,891(37.1%)

Revenues¥33,969 million

Organizational
Development
Division

Consulting &Cloud Business

IR Support
Business

6,418(18.5%)

9,035(49.3%)

Career School
Business

Cram School
Business

2,931(16.0%)

One-stop support for corporate branding
We help companies build their corporate brand with support for a rangeof IR-related media and events.

A network of comprehensive career schools for working professionals
that make it easy to maintain study habits
Through our one-stop support for computer skills, programming ability,
acquisition of qualifications and language learning, we help working
professionals advance their careers.
A network of examination preparatory schools for elementary, junior highand high school students. These schools support the cultivation of humanresources that play an active role in society.
Based on Motivation Engineering, this business supports elementary,junior high and high school students in developing skills for improving
academic performance and playing an active role in society.
Matching services that place talented individuals from overseas seeking
to work in Japan at companies and educational institutions

322(21.9%)

622(42.4%)

Number of
Employees
1,470
524(35.7%)
Notes: 1
 . Revenues and gross profit for each division include interdivisional transactions.
2. Number of employees includes two employees in a business segment that is notincluded in the reportable segments.

Matching
Division

ALT Placement
Business

Personnel
Placement
Business

We provide matching opportunities linking Japanese companies andtalented individuals from overseas, ranging from the placement of assistantlanguage teachers at elementary, junior high and high schools in Japan toreferrals to Japanese companies looking for such individuals.
Matching services that help domestic human resources find satisfying work
We provide a range of matching opportunities, including referral of university
graduates and mid-career employees, as well as an information platform forcareer change and job search.

Chapter 3

Gross Profit¥17,704 million

Individual
Development
Division

We supply corporate clients with diagnostic and transformation solutions
that improve human resource capabilities and employee engagement.

IR BOOK 2023

6,377
(34.8%)

One-stop support for improving employee engagement

28

Businesses and Organizations of the Link and Motivation Group

Organizational Development Division: Consulting & Cloud Business

Making Major Strides As a Growth Driver for the GroupThe Consulting & Cloud Business is a growth driver for the Link

Market Environment

and Motivation Group, and we are committed to allocating

Competitive Advantages• Fiscal 2022 corporate training services market: ¥537 billion1• Employee engagement market CAGR (Fiscal 2021-2026): 24.8%2

management capital to the business. Growth in 2023 slowed
temporarily as companies were forced for the first time to deal
with newly mandatory human capital disclosure. However, needsfor organizational improvement that have been increasing from•C omprehensive support for human capital management
through a cycle of diagnosis, transformation and disclosure•K nowledge and a database accumulated over 20 years since
our founding

Sources:
1. Yano Research Institute Ltd., Survey of Corporate Training Service Market (2023)(Announced on October 27, 2023, based on company net sales)
2. ITR CORPORATION, ITR Market View: Human Resource Management Market 2023,
Employee Engagement Market Size and Forecast (Fiscal 2020-2026/Sales amount)Note: Fiscal years in Japan refer to April 1 to March 31 of the following year.

the second half of the year are expected to support growth going

Opportunities

Challenges for Growth• Growing momentum for human capital management• Mandatory disclosure of human capital information insecurities reports• Increasing recurring revenue per customer (increase in theratio of major companies with high revenue per customer)• Increasing one-time fee revenue per customer (increase
profitability by deepening customer relationships)

forward. By making major strides in this business, which was our
founding business and maintains exceptionally strong competitive
advantages, we continue to drive the expansion of the Group.

IR BOOK 2023

Basic Data
Priority Area

Consulting

Cloud

Profitability

Services
Provided

End Users

Mainly employees, through the HR, corporate planningor other departments of customer companies

Delivery
Methods

Face-to-face
OnlineMotivation Cloud Series

Mainly employees, through the HR, corporate(¥ million)

10,000

74.5

7,500

6,817

• Consulting: ¥6,195 million (-6.7% YoY)
• Cloud-based services: ¥4,671 million (+30.0% YoY)

(%)

80

8,181

7,320

The gross profit margin
has been improving as the
proportion of cloud-based
services has increased since
the launch of Motivation
Cloud in 2016.

60

5,000

40

2,500

20

planning or other departments of customer companies
0

Revenues (2023)

75.3

71.5

Cloud-based services(Subscription services)

Main KPIs• Consulting & Cloud Business revenues• Average revenues per customer• Motivation Cloud series monthly fee revenue

2021

2022

2023

0

■Gross profit ●Gross profit margin

Growth Potential

Stability

3-year CAGR (2021-2023)

Motivation Cloud market
share for 6 consecutive years3

8.9％

No.1

3

Source:3. ITR CORPORATION, ITR Market View:
Human Resource Management Market
2023, Employee Engagement Market:
Sales and Share by Vendor (Fiscal
2017-2022 Forecast)

Chapter 3

Gross Profit/Gross Profit Margin• Recruiting: Strategy design, operational efficiency
improvement and enhancement of recruiting capabilities• Training: Training by rank (new university graduates,
mid-career employees, managers, executives) andtraining by theme• Systems: Personnel system design• Corporate Culture: Employee general meetings
and anniversary events

29

Businesses and Organizations of the Link and Motivation Group

Organizational Development Division: IR Support Business

Aiming for Steady Growth Backed by Mandatory Disclosure of Human Capital Information
Rising needs for disclosure of non-financial information have led
to substantial growth over the past few years in production of
integrated reports, a core service of this business. Collaboration

Market Environment

Competitive Advantages• Number of companies issuing integrated reports in 2022: 884*

• Next step in the sequence after diagnosis and transformationby the Consulting & Cloud Business

Source:KPMG Sustainable Value Services Japan, Survey of Corporate Reports in Japan 2022
* The number of issuing companies is based on Corporate Value Reporting Lab’s, List ofOrganizations in Japan Engaged in the Publication of Self-Declared Integrated Reports,
2022 Edition.

with the Consulting & Cloud Business is also ramping up now
that disclosure of human capital information in securities reports
has become mandatory. As of December 31, 2023, 116 companies
have disclosed the results of their Motivation Cloud diagnosis

Opportunities

conducted by Link and Motivation, and engagement-related• Rising demand for disclosure of non-financial information•R apid increase in number of companies issuing integrated reports

disclosure is making steady inroads. The business aims for steady

Challenges for Growth• Rapid, substantial improvement in productivity

growth by further improving productivity.
IR BOOK 2023

Basic Data
Profitability• Production of various reports•

Priority area

Integrated reports• Shareholder reports• Human capital reports and others

Gross Profit/Gross Profit Margin(¥ million)

(%)

2,000

60

End Users

Investors through corporate IR

43.9

45.7
1,500

1,000

39.7
878

Chapter 3

Services
Provided• Streaming video• Financial results briefings• Briefings for individual investors• General meetings of shareholders

40

959

819

The gross profit margin
has risen due to improved
productivity.

20
500

Delivery
Methods

Production of printed materials and websites, and video production and streaming

0

2021

2022

2023

0

■Gross profit ●Gross profit margin

Revenues (2023)• ¥2,187 million (+5.9% YoY)

Main KPI• Sales of integrated reports (figure not disclosed)

Growth Potential

Stability

3-year CAGR (2021-2023)

Number of corporate
customers in 2023

6.7％

334

Note: The figure for 2022 has been restated toreflect a change in calculation method
in 2023.

30

Businesses and Organizations of the Link and Motivation Group

Individual Development Division: Career School Business

Improving Profit Margins by Moving Services Online
To adapt to changes in learning needs during the COVID-19
pandemic, since the third quarter of 2022 this business has been
restructuring by relocating or closing brick-and-mortar schools
and moving its services online. As it reduced the number ofschools from 81 at the start of restructuring to 53, revenue fromMarket Environment

Competitive Advantages• Estimated market size of e-learning (BtoC) in Japan in fiscal
2022: ¥263.0 billion•A bility to provide a wide range of learning opportunities
in areas ranging from IT to preparation for obtaining
qualifications and language skills

Source: Yano Research Institute Ltd., E-Learning & Digital Education Business 2023
(issued on April 11, 2023, based on provider net sales)

online courses sales grew 58.3% compared with the previous
year. The business also improved operating efficiency faster than
expected. In 2024, it is aiming to further improve operating
efficiency while maintaining revenues by expanding the online
AVV ブランドマーク

services it provides.

Opportunities

Challenges for Growth• Popularization of online courses• Increase the sales ratio of online courses

基本パターン（CMYK）

IR BOOK 2023

DKI ブランドマーク 基本パターン（CMYK）

Basic Data
Profitability
Gross Profit/Gross Profit Margin(¥ million)

45.8

4,000

3,000

38.0

38.9

2,596

2,427

2,571

(%)

50
40
30

2,000

End Users

Working adults aiming for career advancement and university students

Delivery
Methods

53 schools throughout Japan

20
1,000

Priority area0

Online courses

10

2021

2022

2023

0

Restructuring by relocating
or closing brick-and-mortar
schools and moving services
online to adapt to changes
in learning needs during the
COVID-19 pandemic has
substantially improved thegross profit margin at afaster than expected pace.

■Gross profit ●Gross profit margin

Revenues (2023)• ¥5,616 million（-10.0％ YoY）

Main KPIs• A verage number of enrollees/Averagerevenues per enrollee• Online course revenues

Growth Potential

Stability

3-year CAGR (2021-2023)

Average LTV over the past 12 months*-9.3%¥565,014* LTV (Lifetime value) = Average purchase price per customer x Average
number of purchases x Average number of continuous years

Chapter 3

BrandsProvided• Aviva personal computer schools• Daiei qualification schools• Foreign language schools
Rosetta Stone Learning Center
Rosetta Stone Premium Club
Hummingbird

31

Businesses and Organizations of the Link and Motivation Group

Individual Development Division: Cram School Business

Aiming for Stable Growth by Increasing Enrollees and Improving the Retention Rate
The number of enrollees grew substantially in 2023 due to anincrease in enrollments through referrals, among other factors.
The Cram School Business operates two brands—SS-1 forelementary school students and Motivation Academia for juniorMarket Environment

Competitive Advantages• Fiscal 2020 cram school/preparatory school market: ¥924.0
billion• Support that goes beyond exam preparation to help peopleacquire skills of use in society, following diagnosis to identify
each individual’s issues

Source: Y ano Research Institute Ltd., Cram School and Preparatory School
Market 2021 (issued on September 6, 2021, based on operator net sales)high and high school students—making its ability to provide
continuous learning a distinctive feature of the business. It will

Opportunities

Challenges for Growth• Growing market share for the individual instruction method• Expanding scope of needs for learning• Revamping the sales system to increase enrollment rate
• Improving the retention ratecontinue to increase the number of new enrollees by providing
value to a wide range of students through online classes, inaddition to improving the retention rate of enrollees after theytake the junior high school entrance exam.

IR BOOK 2023

Basic Data

Motivation Academia

Individualized instruction school forstudents preparing for the junior highschool entrance exam

Cram school that nurtures humanresources who can succeed in society

Profitability
Gross Profit/Gross Profit Margin(¥ million)

(%)

1,000

60

47.6
750

44.9

45.4

40
500

End Users

Elementary school students

Delivery
Methods

Junior high and high school students

Brick-and-mortar schools (9 schools, mainly in Tokyo)
Priority area

Revenues (2023)• ¥801 million (+11.3% YoY)

Online courses

310

327

360

2021

2022

2023

20

250
0

There have been no major
trend changes. The businesswill work to increase operating
efficiency by continuing tooffer online courses.

0■Gross profit ●Gross profit margin

Main KPI• Average number of enrollees

Growth Potential

Stability

3-year CAGR (2021-2023)

Percentage of students attending
Motivation Academia after SS-1

10.9%

17.3%

Chapter 3

BrandsProvided

SS-1

32

Businesses and Organizations of the Link and Motivation Group

Matching Division: ALT Placement Business

Aiming for Steady Growth amid Severe Competition
Revenues in 2023 were flat due to the severe competitiveenvironment resulting from the requirement for social
insurance coverage for assistant language teachers (ALTs),
as explained on the right. However, competition is expectedto ease during 2024 due to the further expansion of thescope of coverage in October 2024. The business aims toMarket Environment

Competitive Advantages• In October 2022, a law came into effect making it mandatory for part-time workers, including ALTs,
to be covered by social insurance. Link Interac Inc., which operates the ALT Placement Businessand dispatches the largest number of ALTs in Japan’s private sector, was among the initial groupof companies subject to the law, making its operating environment more challenging. However,conditions are expected to improve when the law’s scope of application is extended to allcompanies in October 2024.

• A customer base built over 50 years andemployment of ALTs with a high level ofengagement

recover revenue and expand market share by leveraging
its strength as the leader in dispatching high-quality ALTs

Opportunities

while also moving online and utilizing information and• Popularization of English language classes in school education• Advances in establishing an environment for online classes at schools

communications technologies.

Challenges for Growth• Reviewing investment allocation to sales inorder to acquire large-scale projects and increase
repeat business• Responding to diversifying customer needs

IR BOOK 2023

Basic Data

End Users

Delivery
Methods■Acquisition and development of capable
human resources•Y ear-round hiring at three recruiting bases
outside Japan

Local governments and private schools

Classes are generally held face-to-faceNote: Also expanding online services to meet customer needs■Support system utilizing a nationwide network• Collection of information from educationalsites nationwide• Regular training for ALTs
• Support for handling the necessary mattersin daily life
• Proposals for new lessons in collaboration with
textbook publishers

Profitability
Gross Profit/Gross Profit Margin(¥ million)

4,000

(%)

3,650

3,291

3,000

27.8

3,046

27.4

25.4

2,000

30

20

10

1,000
0

Although gross profit has
decreased due to the impactof higher costs for social
insurance premiums,
improvement is expected in
2024 due to increased
revenues as the competitiveenvironment eases.

40

2021

2022

2023

0

■Gross profit ●Gross profit margin

Revenues (2023)• ¥12,011 million (+0.0% YoY)

Main KPIs• Market share• Average number of ALTs dispatched

Growth Potential
3-year CAGR (2021-2023)-4.3%

Stability
Market share among
private companies

No. 1

*

* LMG survey

Chapter 3

Services
Provided

Features

Dispatch of high-quality non-Japanesehuman resources, mainly to elementary,junior high and high schools

33

Businesses and Organizations of the Link and Motivation Group

Matching Division: Personnel Placement Business

Ramping Up Investment in Marketing in Expectation of Continuing Rapid GrowthCore business OpenWork Recruiting is growing rapidly, backed bya brisk market for changing jobs. This business will continue toinvigorate matching, as well as increase its customer base of bothpeople changing jobs and companies looking to hire them.

Competitive Advantages

Competitive Advantages•F iscal 2022 white-collar employment agency market: ¥351.0 billion• High-engagement matching using one of Japan’s largest
platforms for high-quality online reviews

Source: Y ano Research Institute Ltd., Human Resources Business 2023 (issued on October
20, 2023, based on company net sales)

Continued growth is expected in 2024 due to efforts to encourage
current users to register their resumes. To increase recognition as amatching site, the business is also stepping up promotional

Opportunities

Challenges for Growth

activities to attract users with a strong desire to change jobs.

• Increasing labor mobility• Popularization of reading online reviews when finding orchanging jobs

• Number of resumes registered online• Increasing the number of job openings

IR BOOK 2023

Basic Data
Priority area

OpenWork

End Users

Delivery
Methods

Recruiting Agency

Operation of online review site Contingency fee-based
employment support service
Employee reviews/Evaluation
Number of online resumescores: 16.2 million*
registrations: 1.01 million*
Cumulative registered users:
Number of companies under
6.05 million*
contract: 2,830*

For new university graduatesand mid-career employees

Individuals seeking employment
or considering changing jobs

Individuals seeking employment
or considering changing jobs

Individuals seeking employment
or considering changing jobs

Companies seeking to hire
human resources

Companies seeking to hire
human resources

Online review platform
OpenWork

Online review platform
OpenWork• ¥3,411 million (+32.7% YoY)

Gross Profit/Gross Profit Margin(¥ million)

4,000

98.2

98.3

97.3

3,354
3,000

2,000

Placement support throughcareer advisors* As of December 31, 2023

Revenues (2023)

Profitability

Main KPIs• Number of registered users of OpenWork/Number of
employee reviews and evaluation scores (cumulative)• Number of companies under contract with OpenWork
Recruiting

2,500

(%)

100
80
60

1,907

40
1,000
0

20

2021

2022

2023

Due to the highly profitablemodel of the OpenWork
platform, the businessmaintains a high gross profit
margin above 95%.

0■Gross profit ●Gross profit margin

Growth Potential

Stability

3-year CAGR (2021-2023)

One of the largest numbers ofregistered users in Japan

32.5%

6.05 million (cumulative)

Chapter 3

Services
Provided

OpenWork Recruiting

34

Businesses and Organizations of the Link and Motivation Group

Group Organizational Strategy

We place business strategy and organizational strategy on an equal footing and conduct management that links
them. For organizations, we invest in recruiting, training, systems and corporate culture to increase humanresource capabilities and engagement, thus maximizing productivity, which is a measure of the return on humancapital investment.
Business
Strategy

LINK

Productivity

Organizational
Strategy

Human capital ROI
2023 result: 48.4%

Gross profit per employee
2023 result: ¥10,595 thousand
IR BOOK 2023

Management areas from the perspective of increasing value (proactive investment to generate business results)

Engagement

Degree of alignment between the abilities required by the organizationand the abilities possessed by the individuals in it

Degree of alignment between the organization’s vision andindividual motivation

Indicator

KPI

Indicator

Role Survey Scores2023 Results: Percentage of A rank or higher: Managers: 73.1%;
All employees: 55.4%2024 Benchmark: Percentage of A rank or higher: Managers: 77.0%;
All employees: 57.0%

Recruiting

Investment
Targets

Proactive investment in recruiting humanresources who have the skills necessary
for business growth and a high level of
sympathy with the organization’s vision

Training
Proactive investment in training humanresources to develop the skills necessary forbusiness growth and continue to increase
their sympathy with the organization’s vision

2023 Results: 8 out of 8 companies maintained high standards of
AA rank or higher
2024 Benchmark: 8 out of 8 companies maintain high standardsof AA rank or higher

Systems
Investment in creating and operating
systems that make the most of employees’skills and continue to increase employee
sympathy with the organization’s vision

Management area from the perspective of risk avoidance (immediate response in the event of abnormal levels)

Supervision Target

Engagement Rating

Various risks related to human capital

Corporate Culture
Investment in communication that makes
the most of employees’ skills and continues
to increase employee sympathy with theorganization’s vision

Chapter 3

Human resource capabilities

35

Businesses and Organizations of the Link and Motivation Group

Human Resource Capabilities: Role Survey Scores

The Link and Motivation Group maintains its human resource capabilities at a constant level, with role survey
scores ranked “A” or higher for more than 55% of all employees, and more than 70% for managers.

Role Survey Scores

Upper management

Rating*RatingAAA

Management

A
BBB

LeadersBB
B

Mid-level employees

CCC
CC

Junior employees

C
DDD
DD

2021

2022

2023

Number of eligible
respondents

1,386​

1,137​

1,378​

A rank or higher

713​

646​

764​

Percentage of total (%)

51.4​

56.8​

55.4​

Number of eligible
respondents

159​

146​

156​

A rank or higher

111​

110​

114​

Percentage of total (%)

69.8​

75.3​

73.1​

Score

67 or higher
Less than 67
Less than 61
Less than 58
Less than 55
Average
Less than 52 among thegeneral public
Less than 48
Less than 45
Less than 42
Less than 39
Less than 33* Calculated based on data from approximately 720,000 respondents in 7,030 corporate diagnoses

All employees

Managers andabove

Chapter 3

AA

October 2023 Results

IR BOOK 2023

Roles

A measurement of the degree of alignment between the expectations and satisfaction ofothers regarding the performance of the survey subject

36

Businesses and Organizations of the Link and Motivation GroupEngagement: Engagement Ratings

The Link and Motivation Group continues to maintain a high level of employee engagement, with an Engagement
Rating1 of AAA for six companies and AA for two companies out of the eight Group companies.2

Engagement Ratings

A ranking on an 11-level ratings scale according to Engagement Score,3 calculated based on employee expectations,satisfaction, and the degree of alignment between the two, using one of the largest databases in Japan

RatingRatingPhilosophy andstrategies

Collection of
information
Decision-making

Work content

SupportOrganizational
climateExternal
adaptation

Human
resources
Facilities andenvironment
Systems andbenefits

Workplace

Company

Business
content

Boss

Provision of
information

Internal
cohesivenessTransformation
activities
Succession

AAA
AA
A
BBB
BB
B
CCC
CC
C
DDD
DD

Score

67 or higher
Less than 67
Less than 61
Less than 58
Less than 55
Average
Less than 52 among thegeneral public
Less than 48
Less than 45
Less than 42
Less than 39
Less than 33

1. Engagement Rating is a registered trademark of Link and Motivation Inc. (registration number 6167649).
2. Excluding Link Dining Inc. in the Other segment
3. Engagement Score is a registered trademark of Link and Motivation Inc. (registration number 6115383).
4. Calculated based on data from approximately 4.03 million respondents in 11,360 corporate diagnoses

Division

Company

Feb.
2022

Feb.
2023

Feb.
2024

Link and Motivation Inc.

AAA

AAA

AAA

Organizational
Development Link Event Produce Inc.
Division

AAA

AAA

AAA

Link Corporate Communications Inc.

AAA

AAA

AAA

Link Academy Inc.

AAA

AAA

AAA

Motivation Academia Inc.

AAA

AAA

AAA

Link Interac Inc.

AA

AAA

AA

OpenWork Inc.

BBB

AA

AA

Link-i Inc.

AAA

AAA

AAA

Individual
Development
Division

Matching
Division

Chapter 3

Company
foundation

February 2024 Results

Rating4

IR BOOK 2023

Engagement Measured in
16 Areas

37

Businesses and Organizations of the Link and Motivation Group

Productivity

In 2023, gross profit increased 10.2% and operating income grew a substantial 27.4% compared with the previous
year as productivity (Human capital ROI* ÷ Gross profit per employee) improved in line with our expectations.

Human Capital ROI

Gross Profit per Employee(¥ thousand)(%)

11,00010,595

45
40

41.1%

9,347

35

9,000
30

Chapter 3

10,000

8,775

33.0%
8,000

25
20

2021

2022

2023

* Human capital ROI = Adjusted operating income ÷ Investment in human capital
Adjusted operating income is a profit indicator that measures operating results. It excludes temporary factors suchas goodwill, right-of-use assets, and impairment of fixed assets from operating income.
Investment in human capital reflects total expenditures, including employee salaries and bonuses, statutory
internal and external welfare expenses, commuting expenses and other executive compensation.

7,000

2021

2022

IR BOOK 2023

48.4%

50

2023

38

Businesses and Organizations of the Link and Motivation Group

Recruiting, Training, Systems and Corporate Culture

Recruiting

Proactive investment in recruiting human resources who havethe skills necessary for business growth and a high level of
sympathy with the organization’s vision

Investment Themes

Sample Initiative

Training

Proactive investment in training human resources to develop
the skills necessary for business growth and continue toincrease employee sympathy with the organization’s vision

Investment Themes

Entry Management Survey• Recruiting events• Entry Management Survey/
Entry manager system

8 companies

Sample Initiative

Successor coverage rate

Corporate
CultureInvestment Themes

An employee stock ownership association is a system in which
employees can regularly acquire company stock to help thembuild up assets over the medium-to-long term. In addition tothis benefit, we hope that this opportunity fosters a sense ofownership among employees as members of the Link andMotivation Group. In 2023, the membership rate in theemployee stock ownership association was 90.9%, remaining
at a high level that meets our target.
Employee stock ownershipassociation membership rate

90.9%

112.5%

Investment in communication that makes the most of employees’skills and continues to increase employee sympathy with theorganization’s vision

Employee Stock Ownership Association• Quarterly goal setting andevaluation• Compatible work system• Employee stock ownershipassociation• Life event support

To develop management personnel who can make a differencein carrying out our mission, we conduct a year-long selective
training program called Top Gun Selection, in which participantslearn the perspectives and approaches a manager should have.
The successor coverage rate was 112.5% in 2023, remaining at
a level that meets our target.

Sample Initiative
Group General Meeting• Company events (Group
General Meeting)• In-house media

Once every three months, we hold the Group General Meeting
to share a Group-wide perspective. Through content including
a review of business performance, MVP awards, and messages
from senior management, the meetings provide opportunities
for all employees to act toward common goals. The level ofattendance at Group General Meetings was high in 2023, withan average of 1,371 attendees.

Average number of attendees

1,371

For details, see page 24 of Human Capital Report 2023.

Chapter 3

Investment in creating and operating systems that make themost of employees’ skills and continue to increase employee
sympathy with the organization’s vision

Investment Themes• DX promotion• Management personnel
development• i-Company Branding Support(career management)

IR BOOK 2023

Systems

Top Gun Selection

We use our Entry Management Survey, a diagnostic tool for
visualizing engagement between companies and applicants, thengo through the plan-do-check-act (PDCA) cycle to determine thelevel of sympathy with our philosophy among those we hire. In
2023, we positioned our philosophy and strategies as a selling
point in conducting recruiting for each Group company, and foundthat human resources with the skills we require sympathize with
our philosophy when joining Group companies.
Group companies whose strength liesin LMG’s philosophy and strategies

Sample Initiative

4
ChapterFoundation for Realizing
Our Mission
Message from the CFO

40

A Management Structure That Supports Sustainable
Growth: Corporate Governance
Board Members and Executives

41
42

A Management Structure That Supports Sustainable
Growth: Risk Management

43

Approach to Human Rights

44

Approach to Diversity, Equity and Inclusion/
Approach to Environmental Management

45

40

Foundation for Realizing Our Mission

Message from the CFO

Sustainable corporate growthis essential for achieving asustainable society, and thelinchpin of this growth is people.
Ohno Shunichi
CFO
Link and Motivation Inc.

Three Goals of Our Management Policy
The first goal is “Management with Integrity.” The Group aims to conductbusiness with no illegality or dishonesty with regard to any of its stakeholders,1

2

3Management with
Integrity

Management in Which
Every Employee Plays a
Leading RoleManagement with Good
Reflexes

People Are the Linchpin of Sustainable Growth
Human capital management has been attracting attention lately. This concept
is virtually synonymous with the message that the Link and Motivation Grouphas been communicating to society since its founding—a message thatmanagement driven by employee motivation will be the dominant force in ourera. The Group believes that sustainable corporate growth is essential forachieving a sustainable society, and that the linchpin of this growth is people.
From its position at the forefront of human capital management in Japan, theLink and Motivation Group intends to lead by example, practicing what itpreaches in conducting its own management and proactively disclosing thestatus of its initiatives. We will continue working to improve the corporate valueof the Group as we help to resolve social issues through our businesses inorder to achieve a sustainable society.

Chapter 4

The Link and Motivation Group has set forth its mission: “Through Motivation
Engineering, we provide opportunities to transform organizations and individuals
and create a more meaningful society.” Helping to create a sustainable society
is an indispensable theme for the Group in carrying out this mission, and we
consider it an issue we must address in a straightforward and responsible
manner. For the Group, sustainability means using our businesses to help
resolve a variety of social issues that arise in working to create a sustainable
society, while also establishing connections so that conducting those businesses
also contributes to the sustainable growth of the Group.
In working to achieve sustainability, we share the three unwavering goals of
the Link and Motivation Group’s management policy with all employees, andaddress key issues as we monitor constantly changing social trends.

IR BOOK 2023

Approach to Sustainability

including customers, business partners, employees and shareholders. This
goal has been deeply ingrained in the Group as the most important factor inachieving good governance and fulfilling our social responsibilities. Next,
based on our belief that human resources are a company’s greatest, mostpowerful type of capital, our second goal calls for “Management in Which
Every Employee Plays a Leading Role.” As business shifts from goods toservices, the intangible power of ideas, motivation, hospitality and otherqualities held by human capital determine the fate of a company. We
therefore believe it is important to be an organization in which each of ourdiverse human resources can work with strong motivation toward a common
goal. The third goal is “Management with Good Reflexes.” As the pace ofchange in the operating environment accelerates, the ability to adapt will
become crucial for companies in their ongoing efforts to resolve social issues.
We believe that taking a stance of making swift management decisions toaddress changes in markets and laws as well as generating change ourselves
is essential for sustainable corporate growth.

41Foundation for Realizing Our Mission

A Management Structure That Supports Sustainable Growth: Corporate Governance
Link and Motivation Inc. (the “Company”) has adopted the format of a company with an Audit & Supervisory Board. The Board of Directors makes important management
decisions and supervises the execution of business, while the Audit & Supervisory Board and its members, who are independent from the Board of Directors, audit thestatus of execution of business, among other matters. We work to upgrade and strengthen our corporate governance system to continue to conduct fair and transparent
management activities.

Governance Format

Corporate Governance Structure
General Meeting of Shareholders

MissionAppoint/Dismiss

Appoint/Dismiss

Audit &
Supervisory Board

Board of Directors
Appoint/
Dismiss

Cooperate

Cooperate

Audit &
Supervisory
Board audit

Cooperate

Representative
Directors

Three Goals of the Link andMotivation Group’s Management Policy

Management with Integrity
Management in Which Every Employee
Plays a Leading RoleManagement with Good Reflexes
Current
Governance
FormatCompany with an
Audit & Supervisory Board

Business Divisions

Accounting audit

Internal audit

Board of Directors

Audit & Supervisory Board

Business Divisions

The Board of Directors is composed offive directors (including two outside
directors) and has ultimate authority for
determining fundamental management
policies and high-priority issues. In
principle, it meets once a month, withother meetings held as appropriate whenimportant items arise.

The Audit & Supervisory Board iscomposed of three members (including
two outside members). In principle, it
meets once a month to exchange
opinions on confirming the proper
operation of the Board of Directors,
monitoring the business execution of
directors, and issues related tocompliance and other matters.

The Group Management Committee
meets twice each month. It is attended
by presidents of Group companies
and other related parties other thandirectors and Audit & Supervisory Board
members, as necessary, to report on
matters related to the execution of duties.

Chapter 4Internal Audit & Supervisory
Board Members

Independent Auditor
IR BOOK 2023

Through Motivation Engineering, we provide
opportunities to transform organizations andindividuals and create a more meaningful society

Appoint/Dismiss

42Foundation for Realizing Our Mission

Board Members and Executives
The three internal directors make management decisions that link business and organizational strategies using their extensive experience as organizational and personnel consultants.
The two outside directors leverage a high level of insight gained from corporate management and expert knowledge of industrial and organizational psychology, which has ahigh degree of affinity with the business fields of the Link and Motivation Group, among their other attributes.
In addition, the Company has introduced a corporate officer system to execute management based on prompt decision-making that accurately grasps both the businessenvironment and changes in it.

Directors

Ohno Shunichi

Yuasa Tomoyuki

Kakuyama Takashi

President andRepresentative Director

Director

Outside Director

Outside Director

1986 Joined Recruit Co., Ltd.
2000	Established the Company, andassumed the position of President
and Representative Director
2013	Chairman and Representative
Director (to present)

1991 Joined Recruit Co., Ltd.
2000	Established the Company, and assumed
the position of Director
2013	President and Representative Director(to present)2017	Director, Link Corporate Communications
Inc. (to present), Director, Link Event
Produce Inc. (to present)

1992	Joined Aoyama Audit Company(Price Waterhouse)
1998	Joined PwC Consulting Co., Ltd.
(currently IBM Japan, Ltd.)
2002 Joined the Company
2008 Director (to present)2015	Outside Director, Youji Corporation(to present)

2000	Joined Andersen Consulting, Ltd.
(currently, Accenture Japan Ltd.)2005 Joined Revamp Corporation2010 Director, Revamp Corporation2013	Representative Director, Revamp	Outsourcing Corporation (currently,
Revamp Academy Corporation)(to present)2016	Outside Director, the Company (topresent), President, Representative
Director and CEO, Revamp Corporation,
Outside Director, K’s Holdings Corporation2018	President and Representative Director,
Chief Executive Officer, Revamp
Corporation (to present)

1991 Professor, Tokyo International University
1992	Visiting Researcher, Michael G. Foster Schoolof Business, University of Washington
2003	Dean of Faculty of Human and Social Studies,Tokyo International University
2009	Dean of Graduate School of Sociology, Tokyo
International University
2011	Professor and Director of Motivation Laboratory,
Tokyo Future University
2012	Dean of School of Motivation and Behavioral
Sciences, Tokyo Future University
2018	President, Tokyo Future University (to present),
Director, Sanko Gakuen (to present)
2020 Outside Director, the Company (to present)

Note: Concurrently serves as chairman ofseven consolidated subsidiaries andpresident and representative directorof Phoenix Co., Ltd., an asset
management company.

Audit & Supervisory Board
Kuriyama Hiromi

Note: C oncurrently serves as director of sevenconsolidated subsidiaries and Audit &Supervisory Board member of OpenWork Inc.

Tominaga Kenji

Matsuoka Yasumasa

Audit & Supervisory Board Member (Full-Time)

Outside Audit & Supervisory
Board Member (Part-Time)

Outside Audit & Supervisory
Board Member (Part-Time)1986	Joined Nippon Telegraph and Telephone Corporation (NTT)2005	Joined a2media Corporation as Director, General Manager
in charge of Strategy Promotion
2006	Director, Business Support Department (Accounting, Legal,
Personnel, General Affairs), a2media Corporation2013	Audit & Supervisory Board Member, Japan REIT Inc.
(currently, Prop Tech plus Inc.)
2015	Director, Brainpress Inc. (currently, Inbound Tech Inc.)
2019	Director, Company Administrator, a2media Corporation
2022	Audit & Supervisory Board Member, the Company(to present)

1979	Joined Japan Recruit Center Co., Ltd.
(currently Recruit Co., Ltd.)
1999	Established Career Plan Co., Ltd.,
President and Representative Director(to present)
2000	Outside Audit & Supervisory Board
Member, the Company (to present)
2001	Established Career Design Co., Ltd.,
President and Director

1986 Joined Recruit Co., Ltd.
2000	Executive Officer, General Manager
of Human Resources and General
Affairs Department, Fast RetailingCo., Ltd.
2003	Executive Officer, General Manager
of Marketing and Communications
Department, Fast Retailing Co., Ltd.
2004	Manager, Brand Strategy Office,
SoftBank Corp.
2005	President and Representative
Director, Fukuoka SoftBank HAWKS
Marketing Corp. (currently, Fukuoka
SoftBank HAWKS Corp.), Director,
Fukuoka SoftBank HAWKS Corp.

2007	Representative Director, Career Firm
Co., Ltd.
2011 Outside Director, Onionnews Inc.
2014	President and Representative Director,
Motivation Japan (to present)
2023	Outside Audit & Supervisory Board
Member, the Company (to present)

Click here for entire management team including corporate officers

Chapter 4

Sakashita Hideki

Chairman and
Representative Director

IR BOOK 2023

Ozasa Yoshihisa

43Foundation for Realizing Our Mission

A Management Structure That Supports Sustainable Growth: Risk Management
To facilitate deliberation on various risks related to Group management, the Link and Motivation Group regularly monitors, evaluates and analyzes the status of major risks.
We work to provide necessary instructions and supervision to each Group company, and have established a system for regularly reporting relevant matters to the Boardof Directors.

Risk Management Structure
Board of Directors

Instruct/Supervise

Audit

Audit & Supervisory Board

Demarcate the scope of impact of 1) changes in customer behavior andpreferences, 2) measures to strengthen policies, laws and regulations,
3) requests from investors, 4) new market entrants, and 5) other factors in
the Group’s operating environment.

ReportStep 2(Analyze)• Degree of impact of risks and opportunities (Large/Medium/Small)(1) Depth of impact
Rate of decrease/increase in sales or costs and impact on assets(2) Breadth of impact
Affected department’s sales/costs as a percentage of the Group total• Likelihood of manifestation of risks and opportunities (High/Medium/Low))
High: Already manifested/predicted in the future
Medium: Partially manifested/possible
Low: Latent/low possibility

Click here for more information on business and other risks

Step 3(Assess)

Based on the degree of impact and likelihood of manifestation, comparewith established risk criteria to decide whether or not to respond

Step 4(Respond)

Respond to risks

Chapter 4

Organize risks and opportunities based on degree of impact andlikelihood of occurrence

Internal Audit Office(Risk analysis/evaluation)

IR BOOK 2023

Identify presumed risks and opportunities for
the Group, for each division, and for each business

ReportReportManagement committees ofGroup companies

Determine scope of impact and identify risks
Step 1(Identify)

ReportGroup Management Committee

Instruct/Supervise

Risk Management Process

44

Foundation for Realizing Our Mission

Approach to Human Rights
The Link and Motivation Group conducts businesses that provide organizations and individuals with opportunities for transformation in order to create a more meaningfulsociety. Respect for fundamental human rights is the bedrock of the society we envision, and we consider respect for human rights to be a key element of our effort todevelop and expand business. We have therefore established a human rights policy as a guideline for promoting initiatives to respect human rights, and the Board of
Directors approved its content in March 2024.
Basic Approach

Human Rights Due Diligence

Understanding that the Group’s business activities may have an impact on human rights, we
support and respect the International Bill of Human Rights (including the Universal Declarationof Human Rights), the International Labour Organization’s Declaration on Fundamental
Principles and Rights at Work and other international norms regarding human rights, andpromote initiatives to respect human rights.

To ensure the effectiveness of this policy, we will identify and strive to prevent or mitigate
any adverse impacts on human rights that our business activities may have. We will also workto establish human rights due diligence mechanisms for the ongoing implementation ofthese processes.

Scope of Application

We have established various contact points for employee consultation and reporting on humanrights issues. To address adverse impacts on human rights, we will confirm the facts, consider
ways to resolve the problem and prevent recurrence, and respond by providing remedy tothose who have suffered human rights violations.

This policy applies to all officers and employees of the Group. We also expect our stakeholders
to understand and comply with this policy.

Dialogue with Stakeholders/Information Disclosure
We will disclose the status of our initiatives to respect human rights in the Group’s integrated
report and other materials, and promote initiatives to respect human rights by engaging in
dialogue and consultation with internal and external stakeholders.

Chapter 4

The director in charge of compliance is responsible for oversight regarding respect for humanrights, and the department in charge of compliance plays a central role in coordinating with
relevant departments of each Group company to promote initiatives to respect human rights.
The relevant departments regularly compile information on the status of initiatives and issue
instructions as necessary.

Human Rights Issues
Under our current business structure, risks in the supply chain are low, and we conduct managementwith consideration given to risks at the head office, especially the human rights of workers.

Equal Opportunity and Prohibition of Harassment
We respect all people as individuals regardless of their political beliefs, ideology, religion, gender,
gender identity, sexual orientation, physical characteristics, health status, age, nationality, race,
ethnicity or other attributes. We prohibit all forms of discrimination, disadvantageous treatment
and harassment, and strive to prevent such behavior by conducting regular training for officers
and employees, among other methods. In addition, we provide equal opportunities in hiring,evaluation, training, placement, increases in salary or rank, appointment to positions and othertreatment to promote the creation of a workplace environment where all of our diverse humanresources can thrive.
Payment of Fair Wages and Proper Management of Working Hours
We comply with applicable laws and regulations, pay fair wages and manage working hours
appropriately.

IR BOOK 2023

Promotion System

RemedyInformation Management
We are aware that due to advances in computerization and rising awareness of privacy
in recent years, there are strong demands for the appropriate handling of personal
information. Under our personal information protection policy, information security policy,
and internal regulations, we properly protect personal data and information assets andtake the utmost care to ensure that they are not compromised. In addition, we treat all
customers fairly and equitably, and provide safe and highly convenient services.
Promoting Health and Safety
Health and safety are indispensable for our daily activities. We work to promote healthand safety in the belief that it is of the utmost importance to ensure that our stakeholders
can act safely at all times.
Freedom of Expression and Consideration for Privacy
We respect freedom of expression and privacy in communications on social media andother platforms, and take the utmost care to ensure that there is no violation of such rights.

45

Foundation for Realizing Our Mission

Approach to Diversity, Equity and Inclusion/Approach to Environmental Management
To create new value, the Link and Motivation Group considers it essential to recognize each person’s individuality and maximize their potential without regard to their specificattributes, and is committed to providing impartial opportunities. Our policy for environmental management, an issue which currently has minimal impact on our business, is tocontinuously monitor risks and opportunities and take appropriate measures.

Approach to Diversity, Equity and Inclusion

Women
23.8%
Men

76.2%

* Calculated as the percentage of all management positions (excluding officers) held by women, based on definitions
established by the Ministry of Health, Labour and Welfare.

Approach to Environmental Management

We provide impartial evaluation and promotion opportunities for all employees under apolicy of promoting individuals based on their performance and growth, regardless of
specific attributes such as gender or nationality. The gender ratio in management positions
as of December 31, 2023 is shown in the graph on the upper right. We believe that thereason why women account for 23.8% of the total, or about one-third the amount of men, isbecause fewer women are in career paths that lead to managerial positions, and women are
more likely to take maternity and childcare leave, and for longer periods than men. As aresult, promotion to a managerial position takes a longer time for women.
The Group provides support for life events through systems for balancing childcare andwork. We emphasize an approach of redefining the relationship between the company andthe employee as a way to reevaluate mutual expectations in response to changes inpersonal circumstances, such as marriage, childbirth, childcare and nursing care.
Specifically, our work style option system allows for reduced working hours. Employees canchoose the work style that best suits them from a wide range of options within the parametersof between six to eight hours a day and three to five days a week. In addition, although
Japanese law requires that reduced hours and leave for childcare be available until the child’s
third birthday, we make it available until the child’s graduation from junior high school.
By setting and applying various employment classifications like these, we enable flexible
work styles that respect employee intentions and desires.

Due to the nature of the Group’s business, we consider ourselves to be relatively unaffectedby risks and opportunities related to climate change. Although we prioritize the topics ofgovernance and human capital in responding to mandatory disclosure of non-financial
information, discussions of medium- to long-term management strategies, including risks
214change, are held at meetings of the Board of Directors
and opportunities related to climate
and in the Group Management Committee. Our policy is to continually monitor risks andopportunities and to act at the appropriate time.
CO2 emissions (Scope 2)■ Market based CO2 emissions■ Location-based CO2 emissions(t-CO2)

1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

2022

2023

Chapter 4

Promoting the Active Participation of Female Employees

IR BOOK 2023

We believe that diversity, equity and inclusion cannot be uniformly measured across companies,
but should be appropriately defined according to business content and strategy. For the Group toachieve sustainable business growth and create new value, it is critical that our human resources,
with their diverse talents, personalities and strengths, recognize each other’s strengths and makethe most of their abilities. We need to provide them with opportunities to demonstrate theircapabilities based on a high level of motivation. In other words, it is important to acknowledge theindividuality of each person and their different backgrounds, rather than specific attributes such as
gender or nationality.
Based on this approach, we treat each person equally as a professional without making
judgments based on specific attributes such as gender or nationality, and strive to maximize each
person’s potential.

Gender Ratio in Management Positions*5
Chapter

Corporate Data
Performance, Financial Position and Dividends

47

Key Financial Indicators

48

Revenues by Business/Other Business-Related Data 49
Consolidated Statements of Financial Position

50

Consolidated Statements of Operations andComprehensive Income

51

Consolidated Statements of Cash Flow

52

Company Profile

53

47

Corporate Data

Performance, Financial Position and Dividends (As of December 31, 2023)(¥ million)

2019

2020

2021

2022

2023

Revenues

31,95630,78532,644

32,77633,969Gross profit

13,631

14,00815,34016,06817,704

Performance elling, general andSadministrative expenses

12,625

12,78013,129Other income

173

757

112

779

331

Other expenses

888

1,820

760

439

282

Operating income

2,011

860

2,066

3,627

4,623

Financial revenues

17

8

12

20

16

Financial expenses

167

240

174

146

72

 et income (loss) fromN
continuing operations

1,074

(307)

1,102

2,165

3,137

Net income (loss)

1,090

(929)

1,020

2,223

3,137

31,95630,78532,644

32,776 33,969

2019

2020

2021

2022

20,00010,00002023

Operating Income/Net Income (Loss)(¥ million)
5,000

4,623

4,000

3,627

3,137

3,000

1,086

(996)

918

2,058

2,842

1,090 860

1,020

0

(929)

(1,000)2019

44,78741,08330,062

28,90830,843

Total equity

7,033

4,917

8,648

11,243

12,940Interest-bearing debt

30,03628,37913,887

11,127

11,098

7.20

7.20

7.40

7.70

11.30

Dividends (Yen)

2020

2021

2022

2023

■Operating Income ■Net Income (Loss)

Total Assets/Total Equity(¥ million)
50,00040,0001. Dividends per share of ¥7.20 for 2019 and 2020 consisted of ¥1.80 in each of the four quarters.
2. Dividends per share of ¥7.40 for 2021 consisted of ¥1.80 in each of the first and second quarters and ¥1.90 in each of the third and fourth quarters.
3. As of 2021, the domestic temp staff business of Link Agent Inc. (formerly Link Staffing Inc.) has been classified as discontinued operations. As a result, profits fromdiscontinued operations are presented separately from continuing operations in the consolidated statements of operations. Accordingly, revenues, gross profit andoperating income present the amounts for continuing operations. Amounts prior to 2020 have also been restated in the same manner.

2,223

2,066

2,011

Chapter 5

2,000
1,000

Financial Position

Dividends per share

40,00044,78741,08330,06230,00028,90830,84320,00010,000

7,033

4,917

8,648

11,243

12,940

0

2019

2020

2021

■Total Assets ■Total Equity

2022

IR BOOK 2023

12,084

Total assets(¥ million)
50,00030,00010,904

Net income (loss) attributableto owners of the parent

Revenues

2023

48

Corporate Data

Key Financial Indicators (As of December 31, 2023)

2019

2020

2021

2022

2023

Operating margin (%)

6.3

2.8

6.3

11.1

13.6

Return on equity (ROE) (%)

14.7(18.4)

16.3

24.9

29.6

Basic earnings per share (EPS) (Yen)

10.30(9.50)

8.73

18.45

25.51

Diluted earnings per share (Yen)

10.28(9.50)

8.73

18.43

25.48

Book value per share (BPS) (Yen)

67.13

35.84

67.17

81.19

92.88

Ratio of equity attributable to ownersof the parent to total assets

15.7

9.2

24.9

31.3

33.0

Operating Margin
(%)
15

13.6
11.1

12
9
6

6.3

3

2.8

6.3

2020

2021

0

2019

2022

2023

(%)
40
30
20

24.9

29.6

16.3

14.7

10

(18.4)

(20)

2019

2020

2021

2022

2023

Chapter 5

0(10)

IR BOOK 2023

Return on Equity (ROE)49

Corporate Data

Revenues by Business/Other Business-Related Data (As of December 31, 2023)(¥ million)

2019

2020

2021

2022

2023

Revenues by Business (2023)

Revenues by Business
11,729

9,923

10,81912,092

12,891

Consulting & Cloud Business

10,037

8,274

9,156

10,236

10,867

IR Support Business

2,017

1,907

1,919

2,066

2,187

Individual Development Division

7,838

6,732

7,471

6,960

6,418

Career School Business

7,139

6,071

6,824

6,240

5,616

Cram School Business

704

666

651

720

801

Matching Division

13,131

14,846

15,043

14,564

15,398

ALT Placement Business
Personnel Placement Business

12,563591

12,931
1,946

13,123
1,943

12,006
2,570

12,011
3,411

Total

31,95630,78532,644

32,77633,969

44.4%

2020

2021

2022

2023

18.5%

Number of Employees
1,600

1,391

1,391

1,498

1,493

1,505

1,470

Number of employees (Non-consolidated)

312

403

376

470

499

Average age of employees (Consolidated)
Average age of employees (Non-consolidated)

35.9
30.8

35.6
31.1

36.3
31.7

36.3
31.5

36.5
31.8

1,498

1,493

1,505

1,470

1,200
800

312

403

376

2020

2021

470

499

2022

2023

0

2019

Number and Average Age of Employees
Number of employees (Consolidated)

37.1%

Individual Development
Division

400

2019

Organizational
Development Division■Consolidated ■Non-consolidated

Chapter 5

1. Intersegment transactions are included in Revenues by Business.
2. The name of the Consulting & Outsourcing Business was changed to the Consulting & Cloud Business in 2020.
3. The Group classified the domestic temp staff business of Link Agent Inc. (formerly Link Staffing Inc.) as discontinued operations in 2021. As a result, all relevant figures for
the Matching Division have been restated.
4. In 2022, business categories and business names in the Organizational Development Division changed. All figures for the Organizational Development Division havebeen restated and presented according to the classifications after the change.

Matching
Division

IR BOOK 2023

Organizational Development Division

50

Corporate Data

Consolidated Statements of Financial Position (As of December 31 of each year)(¥ million)

2019

2020

2021

2022

(¥ million)

2023

2019

2020

2021

2022

2023

LIABILITIESASSETS
Current assets
2,160

6,449

4,917

6,112

7,389

Trade and other receivables

4,114

3,680

3,851

3,299

3,627

Inventories

256

187

200

183

225

Other current financial assets

17

14

9

12

12

Other current assets

4,905

1,057

753

1,025

1,446

Total current assets

11,454

11,389

9,732

10,633

12,701

2,174
1,786

2,094
1,615

1,858
1,461

1,821
1,244

4,104
1,839
865
21
1,843
12,831

7,440
1,778
484
129
2,149
15,944

7,161
1,079
716
274
2,075
15,018

5,064
905
712
8
1,725
11,737

6,158
1,005
1,036
43
1,816
13,127

9,177
14,915462
218
148
24,922

7,104
12,056560
362
138
20,222

1,716
3,929
359
256
134
6,395

2,332
2,824
318
328
124
5,927

1,264
2,669
335
386
119
4,774

37,754

36,166

21,413

17,664

17,902

1,380
1,987(1,733)
5,440
(31)

1,380
1,855
(1,733)
3,989(1,731)

1,380
3,879
(320)
4,406
(1,853)

1,380
4,464
(320)
5,385
(1,851)

1,380
4,619
(1,539)7,396(1,690)

7,043
(10)
7,033

3,760
1,157
4,917

7,493
1,154
8,648

9,057
2,185
11,243

10,165
2,774
12,94044,78741,08330,062

28,90830,843

Property, plant and equipment

1,459

1,162

637

599

604

Right-of-use assets

15,941

12,790

4,149

3,308

3,586

Goodwill

5,927

9,376

9,410

9,347

9,347

Non-current liabilities
Interest-bearing and otherfinancial liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities

Intangible assets

2,095

2,266

2,234

2,417

2,194

Total liabilities

Investments in associates

2,788

—

—

—

—

Other non-current financial assets

4,033

3,203

2,744

1,947

1,753

Deferred tax assets

839

646

984

572

584

Other non-current assets

248

245

168

81

70

Total non-current assets

33,33329,694

20,32918,275

18,141

Total assets

44,78741,08330,062

28,90830,843

Non-current assets

EQUITY
Equity attributable to owners of
the parent
Share capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable toowners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

Chapter 5

2,397
1,760

IR BOOK 2023

Cash and cash equivalents

Current liabilities
Trade and other payables
Contract liabilities
Interest-bearing and otherfinancial liabilities
Lease liabilities
Income tax payable
Provisions
Other current liabilities
Total current liabilities

51

Corporate Data

Consolidated Statements of Operations and Comprehensive Income (Years ended December 31)(¥ million)

2020
30,785
16,777
14,0082021
32,64417,304
15,3402022
32,776
16,70816,0682023
33,96916,264
17,704

10,904
173
888
2,011
17
167
43
1,904
829

12,084
757
1,820
860
8
240
41
670
977

12,625
112
760
2,066
12
174
—
1,903
801

12,780
779
439
3,627
20
146
—
3,501
1,336

13,129
331
282
4,623
16
72
—
4,567
1,430

1,074

(307)

1,102

2,165

3,137

15
1,090

(622)
(929)

(82)
1,020

58
2,223

—
3,137

2019

2020

2021

2022

2023

1,090

(929)

1,020

2,223

3,137

Net gain (loss) on revaluation offinancial assets measured at fair value
through other comprehensive income

13(1,397)

22

(57)

526

Total of items that will not bereclassified to profit or loss

13

(1,397)

22

(57)

526

Exchange differences ontranslation of foreign operations

(0)

(2)

4

(5)

1

Total of items that may bereclassified to profit or loss

(0)

(2)

4

(5)

1

Total other comprehensive income

13(1,399)

26

(62)

528

1,103

(2,329)

1,047

2,160

3,665

1,099

(2,396)

945

1,995

3,370

4

66

101

164

294

1,103

(2,329)

1,047

2,160

3,665

Net income (loss)
Other comprehensive income
Items that will not be reclassified
to profit or loss

Items that may be reclassified to
profit or loss

Total comprehensive income(Net income (loss) attributable to)
Owners of the parent
Non-controlling interests
Net income (loss)

1,086
4
1,090

(996)
66
(929)

918
101
1,020

2,058
164
2,223

2,842
294
3,137

18.45

25.51

Diluted earnings (loss) per share
Diluted earnings (loss) per share
(Yen)

18.43

25.48

(9.50)

8.73

Owners of the parent
Non-controlling interests

Net income (loss) per share attributable to owners of the parent
Basic earnings (loss) per share
10.30(9.50)
8.73
(Yen)

10.28

(Attributable to)Comprehensive income

Note: In 2021, the domestic temp staff business of Link Agent Inc. (formerly Link Staffing Inc.) was classified as discontinued operations. As a result, profits from discontinued operations are presented separately from continuing operations in the
consolidated statements of operations. Accordingly, revenues, gross profit and operating income present the amounts for continuing operations. Amounts prior to 2020 have also been restated in the same manner.

Chapter 5

201931,95618,325
13,631IR BOOK 2023

Revenues
Cost of sales
Gross profit
Selling, general and administrative
expenses
Other income
Other expenses
Operating income
Financial revenues
Financial expenses
Equity in earnings of associates
Income before income taxes
Income taxes
Net income (loss) fromcontinuing operations
Net income (loss) fromdiscontinued operations
Net income (loss)(¥ million)

52

Corporate Data

Consolidated Statements of Cash Flow (Years ended December 31)(¥ million)

2019

2020

2021

2022

2023

1,904

670

1,903

3,501

4,567

(0)

(611)

(13)

19

—

2,480

2,798

2,870

1,732

1,688

959

2,386

756

343

230

Cash Flow from Operating Activities
Income before income taxes
Profit (loss) before income taxes fromdiscontinued operations
Depreciation and amortization
Loss on impairment

—

—

(50)

—

(563)

—

20

26

Loss (gain) on sales of fixed assets

—

(7)

(3)

—

—

Stock listing expenses

—

—

—

22

—

Gain on cancellation of insurance

—

—

(8)

—

—

Financial revenues and financial expenses

146

224

163

125

55

Equity in (earnings) losses of associates

(43)

(41)

—

—

—

Loss (gain) on sales of investments
accounted for using the equity method

(160)

—

—

—

—

Decrease (increase) in trade and otherreceivables

418

503

(173)

552

(339)

Loss (gain) on step acquisition

—

16

—

—

—

Decrease (increase) in inventories

22

68

(12)

16

(42)

8

(263)

(78)

(237)

(24)

Other

(43)

657

(547)

(1,216)59

Subtotal

5,693

5,837

4,856

4,830

6,221

9

5

0

6

10

(155)

(226)

(162)

(131)

(67)

Income tax refund

62

28

439

5

45

Income taxes paid

(1,783)(1,675)(816)(1,159)(1,867)

3,827

3,970

4,316

3,550

4,342

Net cash provided by operating activities

2022

2023

Payments for acquisition of property, plantand equipment
Proceeds from sale of property, plant andequipment
Payments for acquisition of intangible assets
Proceeds from business transfer
Proceeds from acquisition of subsidiarystock associated with a change in thescope of consolidation

(337)

(222)

(330)

(135)

(123)

—
(772)
—

16
(699)
—

3
(889)
—

—
(898)
441

—
(533)
—

Payments for acquisition of investment
securities
Proceeds from sale of investment securities
Payments for security deposits and guarantees
Proceeds from recovery of security deposits
and guarantees
Payments for investments in associates
Proceeds from sales of investments
accounted for using the equity method
Advance payments
Payments for fulfillment of asset retirement
obligations
Proceeds from cancellation of insurance
Other
Net cash used in investing activities

—

2,290

—

—

—

(204)

—

—

(169)

(79)

1,966
(122)

636
(56)

513
(272)

1
(46)

989
(60)

120
—

56
—

291
—

990
—

162
—

498
(4,075)

—
—

—
—

—
—

—
—

—
—
(63)
(2,990)

(44)
—
(9)
1,969

(142)
85
13
(728)

(452)
—
(0)
(269)

(74)
—
6
286

Cash Flow from Financing Activities
Net increase (decrease) inshort-term financial liabilities
Proceeds from long-term financial liabilities
Repayment of long-term financial liabilities
Proceeds from exercise of stock options
Payments of stock listing expenses
Payments of cash dividends
Repayment of lease liabilities
Proceeds from payments from
non-controlling interests
Payments for acquisition of interest in
subsidiary from non-controlling interests
Payments for acquisition of treasury shares
Proceeds from sales of treasury shares
Net (increase) decrease in deposits
Other
Net cash provided by (used in) financing activities
Cash and cash equivalents translation adjustment
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(1,000)5,255(1,972)——(747)(1,827)3,640—(2,376)——(754)(2,075)—506(6,173)——(765)(1,968)(1,800)2,400(2,081)
5
(18)
(847)
(1,191)

1,300
100(1,373)84—(1,156)(1,079)—8—

1 ,4 4 9

452

—
(362)
—
—
—
(655)
(0)
180
1,979
2,160

(90)
—
—
—
—
(1,647)
(2)
4,289
2,160
6,449

(753)
—
4,029
—
—
(5,124)
4(1,532)
6,449
4,917

—
(0)
—
—
—
(2,085)
(1)
1,194
4,917
6,112

—
(1,329)—(351)—(3,353)
1
1,277
6,112
7,389

Chapter 5——Interest paid

2021

IR BOOK 2023

Loss (profit) from business transfer

Interest and dividends received

2020

Cash Flow from Investing Activities

Gain on valuation of investment securities

Increase (decrease) in trade and otherpayables(¥ million)

2019

53

Corporate Data

Company Profile (As of December 31, 2023)

Company Information

Name

Link and Motivation Inc.

Head Office

Kabukiza Tower 15F, 4-12-15 Ginza, Chuo-ku,

Share Distribution (Units)
Financial institutions
94,005 (8.32%)

Financial instruments firms
17,844 (1.58%)

Tokyo 104-0061, Japan
EstablishedMarch 27, 2000

Inaugurated

April 7, 2000

Paid-in Capital

1,380,610,000 yen

Fiscal Year-End

December 31

Group Companies

Click here for a list of Group companies

Individuals and other

Other corporations

533,733 (47.21%)

Foreign corporations, etc.
47,563 (4.20%)
1. One share unit consists of 100 shares. The number of shares that are less than one share unit is 16,900 shares.
2. The ratio of the number of shares held to the total number of shares is rounded to the second decimal place.
3. 3,617,168 treasury shares are included as 36,171 share units in “Individuals and other.”

Chapter 5

Share Information

Major Shareholders (Top 10)

Stock Code2170

Shareholder

Stock Listing

Prime Market, Tokyo Stock Exchange

Number ofshares held

Shareholding
ratio (%)

Phoenix Co., Ltd.

42,000,000

38.37%

Trading Unit

100 shares

Suguro Akira

6,874,600

6.28%

Shares Authorized

400,000,000 shares

The Master Trust Bank of Japan, Ltd. (Trust Account)

6,763,300

6.18%

Shares Issued and Outstanding

113,068,000 shares

Link and Motivation Employee Shareholding Company

6,615,700

6.04%

Number of Shareholders

10,987

Sakashita Hideki

3,680,000

3.36%

Sakakibara Kiyotaka

3,680,000

3.36%

Ozasa Yoshihisa

3,000,000

2.74%

Custody Bank of Japan, Ltd. (Trust Account)

2,142,900

1.96%

Link and Motivation Officer Stock Ownership Association

852,800

0.78%

Honda Yutaka

841,500

0.77%

1. The above list of major shareholders excludes 3,617,168 treasury shares.
2. Shareholding ratio is calculated excluding treasury shares.

IR BOOK 2023

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

437,366 (38.69%)

ScopeLink and Motivation Inc. and its consolidated subsidiaries
Reporting Period	January 1, 2023 to December 31, 2023
Note: Includes some information that is outside the above reporting period.
Date of Issue
May 2024
Note: F orecasts and other forward-looking statements contained in this report are based on information currently available to the Company, and are subject to potential risks, uncertainties and other factors.