To Shareholders and Investors

TEMP REPORTBusiness report for the firstsix-month period of the fiscal year
ending March 2017
April 1, 2016 to September 30, 2016

Temp Holdings Co., Ltd.
(Securities code: 2181)

The Temp Group has made a new
step forward as the PERSOL Group.

Message from Management

Overview of the first six-month period of FY 2016

Create social infrastructure
for people and organizations
that catalyze growth andinnovation.

Reflecting the robust trend of the Japanese economy, the human resource services
industry also observed an expansion in demand. Favored by such a market
environment, we endeavored to steadily implement various forms of business, andconsequently, our net sales and operating income for the first six-month period of
the fiscal year under review were 276.7 billion yen and 16.6 billion yen, respectively.
This result represents a record-high performance since the foundation of our Group.

Management Philosophy
Job creation

PROFILE
Masamichi Mizuta
President, Chief Executive Officer, andRepresentative Director
Joined Tempstaff in 1988. Became Head of theSales Headquarters and Director in 1995,
Head of the East Japan Sales Headquarters
and Executive Managing Director in 2006,
Executive Vice President in 2010, andExecutive Vice President and Representative
Director in 2012. He has been in charge of thesales division throughout his career. In 2013,
he assumed the post of President andRepresentative Director. He has also served as
Chairman of the Japan Staffing Services
Association, and Chairman of the Japan
Association of Human Resource Services
Industry. His motto is “Little Things Make a
Big Difference.”

Individual
growthContributing
to societyGroup’s vision
Create social
infrastructure for people
and organizations that catalyze
growth and innovation.

We see two factors contributing to the better-than-expected businessperformance. One is the fact that the decline in the working population in Japan
has begun to affect the real economy in the concrete form of labor shortage. The
other is the fact that more and more companies have decided to employ additional
personnel as a means of addressing the chronic issue of long working hours. Bothof these factors represent challenges facing Japanese society, and we believe thistrend will continue into the future, rather than ending as a temporary trend.
In recent years, new work styles such as telecommuting, teleworking andcloudworking have spread gradually on the back of the remarkable development oftechnology. Meanwhile, the possibility of work that previously required large
numbers of personnel being performed by artificial intelligence and robots is underdiscussion. The roles human beings should undertake will change, and it is likelythat workers will have to redesign their own career plans. Furthermore, changes inwork style in line with life stages have gradually spread in response to women’ssocial advancement. With significant changes in our attitudes toward age, it is notuncommon these days for people in their 70s to be employed.
In this way, our awareness of work has changed with the times, and the types of
employment available have become diversified. With the concentrated power of
the Group, our goal is to become a partner for growth to support workers
throughout their lifetimes, by providing one-stop services suggesting the work
styles that best fit each life stage. Based on such aims, our new brand “PERSOL”
was established in July 2016 to show we are one united group.
“Create social infrastructure for people and organization that catalyze growth andinnovation.” To realize this vision, we continue to make further steps toward the future.

Financial Highlights
Highlights of the six-month period of the consolidated
fiscal year ending March 2017 (FY 2016)

Record-high performance in both net
sales and operating income

UP

Net sales

276.7 billion yen UP

Operating income

16.6 billion yen

5% Y-O -Y
UP 12.

3% Y-O -Y
UP 25.

Profit attributable to ownersof parent company

Interim dividend
per shareUP

9.8 billion yen
7% Y-O -Y
UP 21.

8 yen
Operating income (Billion yen)

28.0

32.5

23.4
18.5
590.0

9.8

517.5

Net sales (Billion yen)

362.4

401.0

247.2

FY 2012FY 2013

FY 2014

FY 2015

FY 2016(forecast)* On November 11, 2016, the Company made an upward revision to its full-year forecast.
The revised figures are shown in the chart above.

1

2

Topics“PERSOL”: A new
Group brand is born.

About the new brand “PERSOL”(Logo)(Meaning)
PER SON ＋ SOL UTION ＝ PERSOL
Through the growth of a “PERSON,” provide a “SOLUTION”
to social challenges.
The group brand name conveys our wish to support working people in their
growth toward a brilliant future.

3

Background to the creation of a new brandIn order to solve the problem of labor shortage in Japanese society, it is crucial
to implement “quantitative expansion” of the labor force by promoting theemployment of women and elderly people, concurrently with “qualitative
expansion,” which refers to the optimization of human resource allocation to
improve productivity.
Furthermore, our strength is that we can comprehensively meet such needs ofthe times by making use of the diverse service menu of the Group. Unfortunately,
however, we see that each service is currently separately recognized, and we havenot been able to exert our comprehensive strength in full.
Considering that the improvement of awareness as one Group is an
important challenge in realizing our vision, to “Create social infrastructure forpeople and organizations that catalyze growth and innovation,” we havedecided to take a step forward by creating a new brand, “PERSOL.”
When we are recognized as one Group, we will be able to provide ourcorporate customers with total assistance ranging from the multifaceted
utilization of human resources to the optimization of human resource
allocation. To individual workers, we will be able to flexibly suggest ways ofworking according to their life stages, and provide support for individual“work” over a lifelong period.

Services provided by the PERSOL Group

Global development of the PERSOL GroupAs a comprehensive human resource service provider capable of meeting avariety of needs relating to “Work,” the PERSOL Group will help companies
and job seekers grow together.

In July, the procedures for joint business in the APAC region with
Kelly Services were completed, and the joint business will beconsolidated in the financial results of the Group from the third
quarter of the current fiscal year. The business scale is expected toreach approx. 60 billion yen per year. We will make our business thehuman resource service infrastructure for the APAC region.

[Business segments and the core companies]
Temporary staffing/BPO segment

ITO segment

North Asia
China,
Hong Kong,
Taiwan,
Korea

India
Engineering segment

Recruiting segment

India

South Asia

Singapore,
Malaysia,
Indonesia,
Thailand,
Vietnam

Oceania

Australia,
New Zealand

General meeting of employees held toward the integrated
management of the GroupIn order to achieve the realization of the Group vision, all of us belonging to the
PERSOL Group must work as one toward our growth. To share this hope, we
held a general meeting of employees of all Group companies for the first timesince the foundation of the Group. Many of our colleagues attended themeeting, transcending the frameworks of business segments and companies.
In the future, we will endeavor to maximize this synergy by further enhancing
cooperation among the Group companies, not to mention the efforts by eachcompany and each employee to improve and expand their individual
characteristics and specialties.

All employees present at the venue are our companions, who
are climbing a mountain that we call our “vision.” Let us walk
together toward the same peak. (President Mizuta)

4

Business Overview by Segment

TopicsWe help working people grow.

Career Assistance by the
PERSOL Group.
As a result of the amendments to the Worker Dispatch Law, theprovision of assistance to those who wish to work as temporary workers
to build careers became obligatory.
With the Group vision “Create social infrastructure for people andorganization that catalyze growth and innovation,” the PERSOL Groupfocuses on skill and career improvement according to the years in which
the job seekers start working.
We will continue in good faith to assist each worker grow throughhis/her job, while drawing out his/her strength and potential.

4

Practice

Annual training
programs forlong-term
temporary workers

Rules forattending courses
Work regulations provide
the details, while
compensations will be
paid depending on the
results of the courses.

*1: Result of the questionnaire survey answered by attendees in FY 2015.
*2: Number of trainees in the skill improvement programs held by the Temp Group in FY 2015.
*3: Number of jobs available through the Company’s media channels including Job Checkit, DODA and an as of October 2016.

5

PERSOLGroup’s
careersupport3

2

99.8%*1 of our customers expressedsatisfaction with our consulting. We
support job-seekers in deciding on
their career plans, both online andthrough face-to-face interviews.

We offer more than 2,600 *2
skill improvement courses.

Temp Open College

Free e-learning

Affiliated schools

A commuting academy forlearning useful points
of workOn-line learning programs
mainly on office automation
available at all times, either
on your smartphone orat homeA variety of programs areprovided through allianceswith schools for theacquisition of qualifications
and business manners.

Demand showed a robust increase,reflecting a further improvement in
employment-related indicesaccompanied by chronic labor shortage.
In response to the increase in demand,
we implemented a variety of measures
for recruiting and supplying personnel,
and as a result, net sales increased.
As for profit, operating income
increased, reflecting a significant impact
from the growth in net sales despite
the increases in labor costs incurred in
the business expansion and the burdenof expenses borne with respect tosocial insurance premiums for
temporary workers and employees of
the Group companies.

ITO segment

Skill improvement

Training program
Training to startworking

Career planning

Highly accurate matching canbe realized from among morethan 310,000 job offers.

We have established training courses in which our staff cansystematically learn the skills required in a workplace according to theyear in which the staff start working.

All those who started
working as temporary
workers

Provision of information

Information useful for building acareer plan is available on the website“Manabi Campanera,” which is
updated on a monthly basis.

Education and Training Plan

Target trainee

1

Temporary staffing/
BPO segment

Skill improvement
seminar for specialists
Seminars to assist those wishing
to work in fields in which theylack experience or in specialized
fields including science courses,
pharmaceuticals, CAD and DPT.

Engineering segment

UP
Net sales(Billion yen)

Full-yearFirst
six-month
period

1.2%
UP 1
436.0

(Forecast)

401.8

214.5

192.8

FY 2015

FY 2016

Operatingincome9.9 billion yen

U

.6 %
P 20

4.7%
UP 1
27.0

(Forecast)

12.8

FY 2016

Operatingincome0.6 billion yen

Net sales(Billion yen)

Full-yearFirst
six-month
periodUP%
23.1

On the back of the continued
improvement of employment-related
indices, and amid persistent robust
demand from customers recruiting
personnel and the rising number ofpeople seeking career changes, net
sales increased as a result of increasing
personnel to expand contact points
between our customer companies
and job seekers. Regarding profit,
operating income increased due
mainly to the impact of growth in net
sales despite an expansion in
expenses related to an increase inpersonnel to meet the rising demand.

24.0

0.8%
UP 1
26.0

(Forecast)

11.3

12.5

FY 2015

FY 2016

Operatingincome1.0 billion yen

Recruiting segment

UP

Net sales increased steadily due to
Net sales
robust demand for SI-related services(Billion yen)and ICT outsourcing services on theback of growth in investment in
24.7
system-related services by our customer Full-yearcompanies as well as internal systemdevelopment in the Group companies.
First
11.2
In terms of profit, operating income
six-month
periodincreased as a result of a rise incontract unit prices due to increases
in consulting services, services utilizing
FY 2015
our self-developed software, and services
requiring highly specialized technologies.

On the back of the favorable
market environment centeringon the automobile industry, we
continued to receive vigorous
demand for engineers specialized
mainly in the automobile industry
for the design, development andtesting fields. Reflecting an increasein contract services and a strategic
shift in resources to growth fields,
net sales grew. As for profit, since
the operating ratio of existing
engineers remained at a high level
and the average price rose due toan increase in the proportion ofhigher value-added contract services,
operating income increased.

UP

01.3%
UP 1

UP
Net sales(Billion yen)

2 . 2%UP 2
105.0(Forecast)

Full-yearFirst
six-month
period71.7
32.2

FY 2015

Operatingincome4.3 billion yen

39.3

FY 2016

9.7%
UP 3* On November 11, 2016, the Company made an upward revision to its full-year forecast. The revised figures are shown in the chart above.

6

Please visit our website for more detailed IR information.

Overview of Consolidated Financial Results
Net Sales
On the back of the favorable
employment-related indices year
on year, demand for various humanresource services continued to showrobust growth. Net sales of theGroup for the first six months of
the fiscal year under review also
increased 12.5% year on year, to276.7 billion yen. This was
attributable to the temporary
staffing business, our core business,in which the number of dispatchedworkers remained at a high level,
and the recruitment support
business, in which the number of
persons achieving career change
increased significantly.

(Billions of yen)(Billions of yen)590.0

(forecast)

600.0

Balance Sheet

Profit attributable toowners of parent

UP

700.0

The website of Temp Holdings Co., Ltd.: http://www.temp-holdings.co.jp/

517.5

500.0

Profit attributable to owners of theparent company was 9.8 billion yen,a year-on-year increase of 21.7%,
due to growth in operating income.

UP(Billions of yen)

Assets

30.0

20.1

300.0

20.0

100.0
0

200.0
10.0

200.0

U

5%
P 12.

FY 2015

Change

236.2

256.3

20.0

130.6

148.9

18.3

Cash and deposits

51.2

65.2

14.0

Non-current assets

105.6

107.3

1.7

Trademark and goodwill

80.4

80.6

0.1

102.7

108.5

5.8

67.4

77.6

10.1

35.2

30.9

–4.3

Convertible bond-typebonds with stockacquisition rights

0.8

0.3

–0.5

Long-term loans payable

24.9

22.7

–2.2

133.5

147.7

14.2

Shareholders’ equity

127.2

134.3

7.0

Capital stock

17.0

17.3

0.2

Capital surplus

20.5

20.0

–0.5

Retained earnings

88.1

96.3

8.2

5 Non-controlling interests

6.2

13.4

7.1

250.0

17.3

276.7

246.1

September
30, 2016

Assets(forecast)

400.0
300.0

March 31,2016

(Billions of yen)

8.1

9.8
150.0

1.7%
UP 2
0

FY 2016

FY 2015

FY 2016

100.0

148.9

130.6

105.6

0

March 31, 2016

Increases due togrowth of profits

POINT 2

Non-current
assets50.0

Current assets

POINT 1

Current
assets

107.3

Increases due to M&A

1

2

Liabilities
September 30, 2016

POINT 33 Current liabilities

Increases in accounts
payable-other, income
taxes payable, etc.

Operating Income(Billions of yen)UP

Dividend per ShareNon-current liabilities

Liabilities and Net Assets(Yen)(Billions of yen)

Operating income for the first six
months of the fiscal year underreview was 16.6 billion yen (anincrease of 25.3% year on year).
Although each business segment
implemented measures for an
increase in personnel, andinvestments in the website for
improvement of the convenienceand awareness of our services,
operating income grew as a resultof an increase in net sales mainly
through temporary staffing and BPO,
and recruiting segments thatexceeded the increase in expenses.

40.0

32.5

(forecast)

30.0

28.0

20.0

16.6

U
0

First
six-month
periodFY 2015

6.00

Year-end

250.0

7.00

8.00

8.00

(forecast)

3%
P 25.

FY 2015

FY 2016

300.0

200.0
150.0

FY 2016

13.2
10.0

Considering the steady growth inperformance, we have decided toincrease the interim dividend for the
fiscal year ending March 31, 2017from the initially planned 7 yen per
share to 8 yen, an increase of 1 yen.
We also revised the forecasts for the
year-end dividend to 8 yen per share.

100.0
50.0

The Company implemented a three-for-one stock split of shares of common stock,with October 28, 2015 as the base date, and October 29, 2015 as the effective date.
The figures in the above table indicate the dividend payment after retroactive
adjustment, taking into consideration the impact of the relevant stock split.

0

Current
liabilities

77.6

Non-current
liabilities

30.9

67.4

35.2

Net assets

133.5

Net assets
POINT 4
Increase in profit
attributable to ownersof parent

147.7
4

March 31, 2016

September 30, 2016

POINT 5
Increases due to M&A* On November 11, 2016, the Company made an upward revision to its full-year forecast. The revised figures are shown in the chart above.

7

8

The PERSOL Group’s CSR Activities

Information

The PERSOL Group is engaged in a wide range of social
contribution activities through the human resource business.
For creating a new society
A practical training program in collaboration with an NPO
was launched for employees of all the Group companies.
We launched a practical training program in collaboration with a non-profit
organization, working to address social issues such as social withdrawal, career
support for the young, and social minority classes. This program looks to the individual
growth of each employee and the realization of social contribution by making challenges
that extend beyond the framework of work.

For providing assistance to womenin the challenges they face(As of September 30, 2016)

CompanyName:

Temp Holdings Co., Ltd.

Established:

October 1, 2008

Head Office:2-1-1 Yoyogi, Shibuya-ku, Tokyo,
JAPAN

Type ofBusiness:

Capital:Management planning,
administration, and operations
related to subsidiary and groupcompanies that handle temporary
staffing and placement services

Members of the
Board

Distribution of Shareholders(Shares)● Authorized number of shares: 720,000,000

Foreigncompanies, etc.

Financial institutions
52,212,600 (22.09%)

67,882,211 (28.72%)● Number of shareholders: 7,088

Financial
instrumentbusiness
operators● Major shareholders
Name of shareholders

Yoshiko Shinohara(As of September 30, 2016)

Number ofshares held

Shareholding
ratio (%)

57,831,600

24.60

Japan Trustee Services
Bank, Ltd. (Trust Account)

14,373,900

6.11

The Yoshiko Shinohara
Memorial Foundation

12,300,000

5.23

The Master Trust Bank ofJapan, Ltd. (Trust Account)

9,788,000

4.16

1,385,839(0.59%)

Treasury stock
1,289,232(0.55%)

Individuals, others
84,702,404(35.83%)Othercompanies,
etc.
28,897,319(12.23%)(As of September 30, 2016)

President, Chief Executive Officer,
and Representative Director

Masamichi Mizuta

Deputy President, Chief Operating
Officer, and Director

Hirotoshi Takahashi

Senior Executive Vice President,
Chief Revenue Officer, and Director

Takao Wada

Executive Vice President, Chief
Information Officer and Director

Toshihiro Ozawa

Executive Vice President, Chief
Financial Officer, and Director

Kiyoshi Seki

External Director

Carl T. Camden

Director

Hiroshi Shimazaki

External Director

Ryosuke Tamakoshi

External Director

Naoshige Shindo

External Director

Naohiro Nishiguchi

Executive Officer

Daisuke Hayashi

The “Summer Kids Idea Day Camp” was held jointly withIntelligence Business Solutions, Ltd. and HIRAMEKI FOUNDATION.

Executive Officer

Toshihito Nagai

Executive Officer

Mikio Miyamura

Executive Officer

Taro Mineo

A workshop for children to “visualize” their own ideas was held.
This workshop provided the children with awareness of what an idea is, and the opportunity
to come up with their own new ideas.

Executive Officer

Toshiyuki Takakura

Executive Officer

Shinji Masaki

Executive Officer

Kazunari Kimura

Executive Officer

Takayuki Yamazaki

For the future of children(As of September 30, 2016)

17,327 million yen

Yoshiko Shinohara“The Temp Group Challenge Women Scholarship” is a scholarship program aimed atproviding assistance to adult women regarding the challenges they face; the 10 recipientsof the scholarship participated in field work on the themes of “Spread the charm of classicalmusic in Japan,” “Raise the success ratio of emergency life-saving in Japan,” and others.

Stock Information● Total number of shares issued: 236,376,605

Chairman Emeritus

Ten recipients of the Temp Group Challenge Women Scholarshipparticipated in the field works organized in Seattle and Sydney.

9Company Profile

Kelly Services Japan, Inc.

9,106,800

Shareholder Information
Business year

From April 1 to March 31 of the following year

Annual general
meeting of shareholders

Late June

Record dates

Annual general meeting of shareholders: March 31
Year-end dividend: March 31
Interim dividend: September 30

Administrator ofshareholders’ register
Special accountmanagement institution

Mitsubishi UFJ Trust and Banking Corporation

Contact

Custody Service Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11 Higashisuna, Koto-ku, Tokyo 137-8081, JAPAN
Telephone: 0120-232-711(Toll free available only in Japan)
URL: http://www.tr.mufg.jp/daikou/

Stock listing

Tokyo Stock Exchange, First Section

3.87

Yoshimi Shinohara

5,438,400

2.31

The Bank ofTokyo-Mitsubishi UFJ, Ltd.

3,696,000

1.57

THE BANK OF NEW YORK,NON-TREATY JASDECACCOUNT

3,621,700

1.54

Woman Staff Ltd.

3,618,000

1.53

BNYM TREATY DTT 15

3,446,841

Electronic public notice
URL: http://www.temp-holdings.co.jp/

1.46* The shareholding ratio is calculated based on the numberof shares (235,087,373) obtained by deducting the numberof shares in the treasury stock from the total number ofshares outstanding.

Public notices(When electronic public notices are not possible
due to accidents or other unavoidable circumstances,announcements will appear in the Nihon Keizai
Shimbun newspaper.)10

Procedures for Shares
Shares registered in the accounts of securities companies, etc.
Contact

Procedures, inquiries, etc.
Inquiries about sending and returning of mailInquiries about dividends after expiration of payment period
General inquiries about administrative work relating to shares
Procedures and inquiries other than those stated above, such as changes
in address, name, etc.

Administrator ofshareholders’register

Custody Service Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11 Higashisuna, Koto-ku, Tokyo 137-8081, JAPAN
Telephone: 0120-232-711 (Toll free available only in Japan)

Please contact your securities company.

Shares registered in the special accountProcedures, inquiries, etc.

Contact

Requests for transfer from a special account to a general account
Changes in address, name, etc.
Inquiries about account balance

Special accountmanagement
institution

Designation of method for receiving dividends (*)
Inquiries about sending and returning of mailInquiries about dividends after expiration of payment period
General inquiries about administration work relating to shares

Custody Service Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11 Higashisuna, Koto-ku, Tokyo 137-8081, JAPAN
Telephone: 0120-232-711 (Toll free available only in Japan)
Method for requesting procedural documents

Administrator ofshareholders’register

Request using the automatic answering phone system:
0120-244-479 (Toll free available only in Japan)
Download documents online: http://www.tr.mufg.jp/daikou/(*) Shareholders holding shares registered in the special account may not choose the method of receiving dividends in proportion to the number of shares held.

Temp Holdings was selected as a component of the JPX-Nikkei Index 400 in August 2014.
What is the JPX-Nikkei Index 400?

It is a new stock price index composed of stocks of companies that meet the requirements of global investment standards, including theeffective use of capital, an investor-conscious management viewpoint, etc., which was established with the aim of promoting theattractiveness of Japanese companies to both investors at home and abroad.

Temp Holdings Co., Ltd.
Shinjuku Maynds Tower, 2-1-1 Yoyogi, Shibuya-ku, Tokyo, JAPAN Telephone: +81-3-3375-2220* Matters stated in this report include statements concerning the Company’s plans and forecasts for the future. Actual earnings may differ materiallyfrom the statements due to a variety of factors, and the statements do not mean that we promise to achieve these figures.

This printed product uses FSC®-certified paperand vegetable-oil-based ink.