Consolidated Financial Results for 2017
[Japanese GAAP]
February 13, 2018

Company name: WORLD HOLDINGS CO., LTD.

Listing: Tokyo Stock Exchange, First Section
Stock code:
2429
URL: http://www.world-hd.co.jp
Representative: Eikichi Iida, Chairman and President
Contact:
Shigeru Nakano, Executive Director, Head of Corporate Planning Division
Tel: +81-92-474-0555
Scheduled date of Annual General Meeting of Shareholders:March 23, 2018
Scheduled date of payment of dividend:
March 26, 2018
Scheduled date of filing of Annual Securities Report:
March 26, 2018
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:Yes (for analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for 2017 (January 1 to December 31, 2017)(1) Consolidated results of operations(Percentages shown for net sales and profits represent year-on-year changes)
Net sales

Operating profit

Million yen%

Million yen

2017
127,147 34.8
2016
94,3347.2
Note: Comprehensive income (millions of yen)%

Million yen%

7,064 (4.6)
7,007
7,407 44.2
7,306
2017: 4,893 (up 15.4%)

Net income per
share

Diluted net income
per share

Yen

Yen

Profit attributable toowners of parent

Ordinary profit%

Ordinary profit on Operating profit tototal assets
net sales

Return on equity

2017
275.35270.682016
250.92248.30
Reference: Equity in earnings of affiliates (millions of yen)
2017: -

Million yen(4.1)
4,612 10.0
42.3
4,192 10.0
2016: 4,241 (up 13.6%)

%

%

%

28.8
33.5

9.1
11.3
2016: -

5.6
7.9(2) Consolidated financial position
Total assets

Net assets

Million yen

Equity ratio

Net assets per share

Million yen

As of Dec. 31, 201780,039As of Dec. 31, 2016
73,392
Reference: Shareholders’ equity (millions of yen)%

19,14015,464As of Dec. 31, 2017: 17,818

Yen

22.3
1,059.91
19.4
850.00
As of Dec. 31, 2016: 14,201(3) Consolidated cash flows
Cash flows fromoperating activities
2017
2016

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen

Million yen

Million yen

8,159(3,644)(2,668)(1,473)(3,058)
9,999

18,227
15,764

2. Dividends
Dividends per share
2Q-end3Q-end Year-end

1Q-end201620172018 (forecast)

Total

Total
Payout ratio Dividend on equity
dividends (consolidated) (consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

0.00
0.00
0.00

-

75.30
82.70
82.80

75.30
82.70
82.80

1,258
1,390

30.0
30.0
30.0

10.1
8.7

3. Consolidated Forecast for 2018 (January 1 to December 31, 2018)
Net salesFirst half
Full year

Operating profit(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

Yen

61,064145,137

7.4
14.1

1,154
7,288

(61.3)
3.2

1,050
7,083

(64.4)
1.1

656
4,635

(68.2)
0.5

39.04
275.73

* Notes(1) Changes in significant subsidiaries during the period (change in scope of consolidation): Yes
Newly added: 2 (Hoei Construction Co., Ltd., Farm Co., Ltd.)

Excluded: -(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(3) Number of shares issued (common stock)1) Number of shares issued at the end of the period (including treasury shares)
As of Dec. 31, 2017:16,932,500 shares

As of Dec. 31, 2016:

16,831,500 shares

As of Dec. 31, 2016:

125,346 shares

2) Number of treasury shares at the end of the period
As of Dec. 31, 2017:

120,846 shares

3) Average number of shares during the period
2017:

16,750,222 shares

2016:

16,707,781 shares(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for 2017 (January 1 to December 31, 2017)(1) Non-consolidated results of operations
Net sales
2017
2016

Million yen%

Million yen%

Million yen%

Million yen

%

1,347
1,032

30.5
63.0

54
18

196.7
-

4,676
3,202

46.0
214.6

4,602
3,059

50.5
215.9

Net income per share
2017
2016

(Percentages represent year-on-year changes)
Ordinary profit
ProfitOperating profit

Diluted net income per
share

Yen

Yen

274.77183.06270.12
181.15(2) Non-consolidated financial position
Total assets

Net assets

Million yen

As of Dec. 31, 2017
43,519As of Dec. 31, 2016
42,655
Reference: Shareholders’ equity (millions of yen)

Equity ratio

Million yen

11,136
7,678
As of Dec. 31, 2017: 11,002

Net assets per share
%

Yen

25.3
654.4717.6
449.72As of Dec. 31, 2016: 7,515* The current financial report is not subject to audit procedures.
* Cautionary statement with respect to forward-looking statements, and other special items
Forecasts of future performance in this document are based on assumption judged to be valid and information currently
available to the Company’s management. Actual results may differ materially from the forecasts for a number of reasons.
Please refer to “1. Overview of Results of Operations, (5) Outlook” on page 6 for forecast assumptions and notes of caution for
usage.

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

5(3) Cash Flows

5(4) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years

6(5) Outlook

6

2. Basic Approach for the Selection of Accounting Standards

7

3. Consolidated Financial Statements and Notes

8(1) Consolidated Balance Sheet

8(2) Consolidated Statements of Income and Comprehensive Income

10

Consolidated Statement of Income

10

Consolidated Statement of Comprehensive Income11(3) Consolidated Statement of Changes in Equity

12(4) Consolidated Statement of Cash Flows

14(5) Notes to Consolidated Financial Statements

16

Going Concern Assumption

16

Additional Information

16

Segment and Other Information

16

Per-share Information

19

Subsequent Events

19

1

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

1. Overview of Results of Operations(1) Results of Operations
The Japanese economy recovered slowly in 2017 as capital expenditures and inventory investments increased due
to benefits of the global economic upturn. Growth in Japan’s internal demand also contributed to the recovery. In
the December Bank of Japan tankan report, a business sentiment diffusion index of large companies andmanufacturers improved sharply by 3 points from the previous survey in September to 25. Higher resource prices
and the recovery in U.S. capital expenditures were two reasons for thi s improvement. However, the employment
conditions diffusion index worsened because of Japan’s persistently tight supply of labor. In addition, the average
job openings-to-applicants ratio in 2017 was 1.50, the highest level in 44 years, showing that the la bor shortage atcompanies is becoming increasingly severe.
The performance of the World Holdings Group exceeded the initial plan for 2017 due to measures to expand theactivities of existing businesses combined with substantial investments to enter new bus iness fields. As a result,sales and profit attributable to owners of parent rose to all-time highs.
In the core Human Resources and Education Business, the need to recruit people was concentrated at large
companies because of Japan’s increasing labor shortage and the 2015 amendments to the Worker Dispatching Act.
To hire a higher percentage of applicants and raise the employee retention ratio, we located jobs that accurately
targeted the needs and interests of workers (both current employees and applicants ) and we focused on employee
training programs and strengthening administrative systems. These actions resulted in a record -high number ofpeople in this business and sales, making a big contribution to the Group’s consolidated performance.
In the Real Estate Business, land and condominium prices were increasingly volatile due to the activities of large
companies, primarily in the Tokyo area. In this difficult environment, we supplied properties that matched thecharacteristics of areas where we operate and focused resources on carefully selected activities. These measuresresulted in the establishment of a business structure capable of producing the best possible earnings. In 2017,
Hoei Construction Co., Ltd., a builder of detached houses in Hokkaido, became a subsidiary. The acquisition ofthis company gave the Real Estate Business, which primarily conducts development activities, an even stronger
and more stable base of operations. As a result, this business achieved record -high sales in 2017.
The Information and Telecommunications Business, where Japan’s mobile phone sector is at the saturation level,
was closing stores up to the beginning of 2017. But investments were made in 2017 to build a foundation forrenewed growth. The number of stores has started increasing again, enabling this business to strengthen its
presence in the Kyushu area.
Net sales increased 34.8% year on year to 127,147 million yen. Operating profit decreased 4.6% to 7,064 million
yen, ordinary profit decreased 4.1% to 7,007 million yen, and profit attributable to owners of parent increased
10.0%, to 4,612 million yen.
Results by business segment are described below.
Factory Business
There was growth in this business primarily in the semiconductor, machinery and logistics industries in 2017.
One reason was the current need for people at companies. Growth was also supported by activities for the training
and easy movement from job to job of next-generation employees. This skill is certain to become a key factor thatdifferentiates our Factory Business.
We placed priority on building workplace organizations that can contribute as quickly as possible tomanufacturing activities, launching large-scale projects and capturing orders for our original projects. To do this,we made it easy for key people needed to launch these organizations to move from one assignment to another andwe concentrated recruiting activities on specific regions. In addition, this strategy and our performance earned
high marks from clients for our company as well as our employees. This allowed us to raise our fees, which
contributed to the growth in earnings in this segment.
In the logistics sector, we created a framework and achieved a level of performance that competitors in the humanresources field cannot match. This was accomplished by making substantial investments in training programs and2

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

building a sound organizational structure. Furthermore, we continued to make progress with using highproductivity backed by our organization to set ourselves apart from third -party logistics companies, our maincompetitors in the logistics sector. As a result, the number of people in this sector increased more than double
compared with one year earlier.
We continued to enlarge the target for recruitment. The number of people registered on our Job Paper website is
now more than 50,000. We also strengthened our regional marketing activities to conduct recruiting activities thatare efficient and have a high matching success ratio. There were also measures to upgrade administrative
operations. All these actions improved our employee retention ratio. The result was an increase of more than
4,000 in the number of people placed at client companies compared with one year earlier, which made acontribution to sales growth.
In Fukushima prefecture, we have been recruiting people affected by the March 2011 earthquake and tsunami forsome time on an outsourcing basis. During the almost seven-year period since this disaster, we have created jobs
for more than 15,000 people.
As a result, sales were 41,654 million yen, up 38.3% year on year and segment profits increased 24.4% to 2,587
million yen.
Technology BusinessIn response to the shortage of engineers at companies in Japan, we established a training program that makes it
possible to recruit experienced engineers as well as new college graduates and inexperienced individuals who
agree to undergo training. This business continued to grow due to these activities. Our Design Center provides
training to turn inexperienced people into engineers. At this center, we are working with Advan Inc. to offer
courses for mechanical design engineers and system integration engineers (server virtualization, Java
programming, embedded controls, etc.), two fields where there is strong demand at companies. These ac tivities
have produced more than 200 new engineers, including new college graduates. Furthermore, there was steadyprogress with the placement of people undergoing training. All these measures contributed to the growth in sales
and earnings in this business.
The repair section, which handles audio-visual products and home appliances, concentrated on serving
high-volume retailers because this is a growing market sector. The business also increased services provided tocompanies in the logistics sector by leveraging its inspection expertise, which is a key strength. Nikken TechnoCo., Ltd. used structural reforms to aim for growth in the camera repair market. In the construction section, which
specialized in building construction, the system for hiring and pla cing inexperienced workers was reexamined andother actions were taken to establish a foundation for growth in 2018 and afterward.
Sales were 12,155 million yen, up 17.6% year on year and segment profits increased 24.4% to 1,263 million yen.
R&D BusinessAs one of the leading company in the Japanese market for outsourced R&D services, mainly involving chemicals
and biotechnology, we are creating an even higher quality training environment for employees with the goal ofproviding services that have more added value. Recruiting outstanding people is another goal. As a result, theR&D Business continued to grow in 2017. Another priority is the establishment of a training infrastructure thatcan give research engineers highly advanced specialized skills. One st ep to create this framework was the signingin 2017 of joint research agreements with two universities: Teranishi Laboratory of the Institute for Chemical
Research of Kyoto University and Inui Laboratory of the Graduate School of Life and Environmental Sci ences ofOsaka Prefecture University. We also focused on branding to reinforce the market profile of this business.
Recruiting research personnel with outstanding skills was another theme of the year.
DOT World Co., Ltd. is a clinical research outsourcing company that performs clinical trials for client companies.
By using the growing number of people who have completed its training programs, this company has created an
infrastructure capable of meeting customers’ needs with flexibility. This framework impr oved efficiency,
resulting in a performance in 2017 that surpassed the plan.
Sales were 6,489 million yen, up 17.3% year on year and segment profits increased 11.0% to 634 million yen.

3

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

Sales & Marketing BusinessTo continue growing in this business, we created a more independent internal organization in order to specializein the temporary placements based on registrations. We reexamined the job categories and business domains
covered and other aspects of operations in order to build a more powerful foundat ion for this business. Althoughearnings decreased, these actions boosted sales because of higher sales per employee associated with an
improvement in workforce utilization efficiency.
Sales were 5,741 million yen, up 1.5% year on year and segment profits decreased 26.1% to 219 million yen.
Real Estate Business
Sales and earnings in this business are recognized when the sale of a property closes. Business operations are
conducted by using a strategy that minimizes risk exposure while constantly monitoring changes in market
conditions in areas where we operate. In 2017, there was a large number of closings in the fourth quarter atdevelopment projects. In addition, the renovation business continued to grow throughout the year and sales ofprefabricated houses were strong. This business also includes the detached house business of Hoei Construction.
As a result, the Real Estate Business, which has an extremely well -balanced composition of sales, recorded
all-time high sales in 2017.
The performance of each category of this segment was as follows.
The development business completed the sale of 170 condominium units, mainly at One Park Residential Towers
and Residential Morisekinoshita. In addition, 10 sites for business use were sold. The result was property sal es of
26,138 million yen. Sales from real estate brokerage and other activities totaled 2,813 million yen.
In the renovation business, 508 residences were sold due to the procurement as planned of properties in 2016.
Sales totaled 9,767 million yen. Due to the outlook for more growth in this business sector, Mikuni Co., Ltd.
reinforced branding activities with measures that included TV commercials and other investments.
In the detached house business, Hoei Construction posted strong sales in Hokkaido of houses using its Challenge
999 brand. Sales and closings were both steady at this company’s large development project in the Shinhassamu
district of Sapporo. In addition, sales closed for 343 custom-built houses. The result was sales of 8,251 million
yen.
In the prefabricated house business, sales were strong at Omachi World Co., Ltd. in the Tohoku region, its
primary market, as well as in Kyushu, a new strategic area for this company. The rental business and sales ofexisting prefabricated houses also performed well. Sales totaled 2,110 million yen as a result.
Sales were 49,080 million yen, up 42.3% year on year and segment profits decreased 10.4% to 4,635 million yen.
Information and Telecommunications Business
Competition continues to become even more intense in Japan’s mobile phone sales sector, which has become amature market. Customers can choose services from major communication carriers as well as mobile virtual
network operators. Furthermore, inexpensive smartphones are readily available. Japan now h as a very large
number of mobile phone rate plans and services provided by the main brands of major carriers and a variety of
secondary brands. To retain our appeal among customers, we made investments to renovate and relocate storesand open new ones. We also gave our people training to give them excellent skills for interacting with customers.
As a result, the number of directly-owned stores rose to 52 and our market share in Kyushu increased. Sales werehigher than in 2016 as the growth rate in the number of mobile phones sold exceeded the national average.
However, earnings were down mostly because of investments in stores, a decrease in some fees and higher
promotion expenses.
This business also includes services that enable small and midsize companies to cut costs. Performance in 2017
benefited from the addition of salespeople and a reexamination of purchasing activities in the environmental
business, which includes the sale of LED lights. Furthermore, the product lineup was expanded. The result wasstrong sales and earnings.
Sales were 9,167 million yen, up 18.4% year on year and segment profits decreased 89.7% to 25 million yen.

4

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

OthersThere was a big increase in sales at Advan Inc. mostly because of higher PC school sales and, in the creative
sector, growth in website design and creation sales and in online sales. Advan developed its own engineer training
program with the cooperation of the Human Resources and Education Business. This program helped improve theskills of engineers in the Technology Business, a synergy that produced a major benefit for the entire group.
Farm Co., Ltd., which became a subsidiary in 2017, and its subsidiary operate an agricultural park business. To
quickly rebuild this business, personnel and business processes were reexamined and actions were taken toincrease employees’ motivation. In addition, a thorough investigation of operations was conducted. These
measures are enabling Farm to make preparations for a realignment of its facilities and investments in 2018.
Sales were 2,856 million yen, up 499.7% year on year and there was a segment loss of 272 million yen, comparedwith a segment profit of 17 million yen in 2016.
(2) Financial Position
AssetsTotal assets increased 6,647 million yen from the end of 2016 to 80,039 million yen at the end of 2017. This was
mainly due to increases of 2,456 million yen in cash and deposits resulting from the acquisition of subsidiaries,
2,829 million yen in real estate for sale, 2,635 million yen in property, plant and equipment, and 1,869 million
yen in notes and accounts receivable-trade, and a 4,659 million yen decrease in real estate for sale in process.
Liabilities
Total liabilities increased 2,971 million yen from the end of 2016 to 60,899 million yen. This was mainly due toincreases of 935 million yen in accounts payable-real estate, 3,233 million yen in short-term loans payable tofund purchases of real estate for sale and the stock of subsidiaries, and 1,010 million yen in accrued expenses, anda 2,818 million yen decrease in long-term loans payable resulting from repayments associated with the sale ofreal estate for sale and real estate for sale in process.
Net assets
Net assets increased 3,675 million yen from the end of 2016 to 19,140 million yen mainly due to a 3,335 million
yen increase in retained earnings.
(3) Cash Flows
Cash and cash equivalents at the end of 2017 increased 2,462 million yen from the end of 2016 to 18,227 million
yen.
Cash flows from operating activities
Net cash provided by operating activities was 8,159 million yen. Main positive factors include profit before
income taxes of 7,204 million yen and a 4,496 million yen decrease in real estate for sale. Major negative factors
include a 1,777 million yen increase in notes and accounts receivable-trade and income taxes paid of 4,381
million yen.
Cash flows from investing activities
Net cash used in investing activities was 2,668 million yen. Main positive factors include collection of loans
receivable of 183 million yen. Main negative factors include payments of 901 million yen for purchase ofproperty, plant and equipment and 2,022 million yen for purchase of shares of subsidiaries resulting in change inscope of consolidation.
Cash flows from financing activities
Net cash used in financing activities was 3,058 million yen. Main positive factors include a net increase of 2,998

5

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

million yen in short-term loans payable and proceeds of 5,048 million yen from long-term loans payable. Main
negative factors include repayments of long-term loans payable of 9,606 million yen and cash dividends paid of
1,258 million yen.
Reference: Cash flow indicators
2013

2014

2015

2016

2017

Equity ratio (%)

18.7

16.1

19.2

19.4

22.3

Market value-based equity ratio (%)

37.4

44.7

42.3

46.8

75.3

Interest-bearing debt to cash flow ratio (%)(722.9)1,373.7(704.2)(1,159.2)

522.8

Interest coverage ratio (times)(23.8)

19.7(31.5)(21.7)

36.3

Equity ratio: Shareholders’ equity / Total assets
Market value-based equity ratio: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio = Interest-bearing debt / Cash flows
Interest coverage ratio = Cash flows / Interest payments
Notes: 1. All indices are calculated based on consolidated figures.
2. Market capitalization is calculated by the total number of shares outstanding after the deduction of treasury shares.
3. Cash flows are calculated using the figures for operating cash flows on the consolidated statement of cash flows.
4. Interest-bearing debt includes all debt on the consolidated balance sheet that incur in terest.

(4) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years
The basic policy for profit distributions is to distribute profits in a manner that reflects results of operations while
retaining sufficient earnings for future business operations and for making business operations stronger. For
dividends, the goal is to stably and consistently increase the dividend while using a consolidated payout ratio of
30% as the guideline for dividends.
We plan to pay a year-end dividend of 82.70 yen per share for 2017, as stated in “Notice of Differences between
Forecast and Results of Operations and Dividends from Surplus” announced on February 13, 2018.
We plan to pay a year-end dividend of 82.80 yen per share for 2018 in accordance with this policy.
(5) Outlook
Japan’s economy is expected to continue to recover. An economic downturn in Asia is possible and there isincreasing geopolitical risk due to many sources of tension. However, Japan’s exports are likely to continue
growing along with the global economic recovery and internal demand is also likely to increase.
The World Holdings Group is currently implementing the New Medium-term Management Plan 2021. Based on
this plan, we are expanding operations to new fields, chiefly associated with existing businesses, and aiming forthe best possible level of earnings. We are also making substantial investments with long -term perspectives. All
activities are aimed at building a stable and powerful foundation for business operations so the Group cancontinue to grow.
In the Human Resources and Education Business, the realignment of the temporary staffing business is likely togain momentum in 2018 and afterward due to the effects of amendments to the Worker Dispatch ing Act. The goalof the World Holdings Group is to differentiate its services by creating an organization that combines careerdevelopment support with education and training to produce people who are highly motivated. We want tosteadily raise the speed at which we create a cycle that produces an environment in which we can provide services
at increasingly higher levels. Building an organization with strength and depth for both people and technologies isanother goal. By clearly establishing a distinctive position within our b usiness domains, we plan to extend ouroperations to previously undeveloped categories of people, companies and technologies. We believe this will
open up new potential for the outsourcing business.
The Real Estate Business is highly vulnerable to changes in the economy and changes in regional businessclimates. This business is using up-to-date information about market trends and other subjects acquired from its
nationwide network to create strategies targeting individual regions. We are controlling the ti ming of purchases
6

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

and sales and aiming for operations with the most suitable size as well as stability. At the same time, we will
make substantial investments in new real estate business domains and geographic regions where there are
attractive opportunities in order to grow.
As industries associated with the Information and Telecommunications Business undergo a realignment, we willcontinue making investments in stores and employee training. We are determined to assemble a network ofoutstanding stores that are needed by the residents of the areas served by each store. We plan to use this network
to build stronger ties with mobile communication carriers and our customers. This business will continue to sellmobile phones and other products that produce a steady revenue stream. Moreover, we intend to leverage thesales and operational skills associated with these products to become among the first to take part in promoting
new IT products. Becoming even more profitable is the objective.
The New Medium-term Management Plan 2021 has the goals of raising sales to 200 billion yen and operating
profit to 10 billion yen in 2021, the plan’s final year. We plan to reach these goals by extending our three corebusinesses into more peripheral fields while continuing to use mergers and acquisitions to add businesses to ourgroup.
Based on the above, we forecast net sales of 145,137 million yen (up 14.1% year on year), operating profit of
7,288 million yen (up 3.2% year on year), ordinary profit of 7,083 million yen (up 1.1% year on year), and profit
attributable to owners of parent of 4,635 million yen (up 0.5% year on year) in 2018.
2. Basic Approach for the Selection of Accounting Standards
The Group uses Japanese accounting standards.
Decisions about the use of International Financial Reporting Standards will be made by taking into consideration
the use of accounting standards in Japan and other countries.

7

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Millions of yen)
2017
(As of Dec. 31, 2017)2016(As of Dec. 31, 2016)
AssetsCurrent assets
Cash and deposits

15,77018,227

Notes and accounts receivable-trade

8,334

10,204630

889

Real estate for sale

9,495

12,324Work in process

105

117

29,344

24,684Merchandise and finished goods

Real estate for sale in process
Deferred tax assets
Other
Allowance for doubtful accounts

466

416

2,852

3,499

(3)

(48)

66,99670,315

1,051

8,362

Accumulated depreciation(537)(6,848)

Buildings and structures, net

514

1,513

Land

873

1,961

Other

1,912

3,308

(1,229)(2,076)

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Accumulated depreciation
Other, net

683

1,232

2,071

4,707

1,521

1,552

350

368

1,872

1,921

Investment securities

636

821

Deferred tax assets

469

659

Lease and guarantee deposits

691

847

Other

732

845

Allowance for doubtful accounts

(77)

(77)

Total investments and other assets

2,451

3,094

6,395

9,724

73,39280,039Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets

Total non-current assets
Total assets

8

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

(Millions of yen)
2017
(As of Dec. 31, 2017)2016(As of Dec. 31, 2016)
Liabilities
Current liabilities
Notes and accounts payable-trade991

Accounts payable-real estate

1,286

251

1,187

Short-term loans payable

29,86133,094

Accrued expenses

4,817

5,827

Income taxes payable

1,817

1,509

Accrued consumption taxes

1,877

1,323

59

72

Other

4,341

4,874

Total current liabilities

44,01849,175

12,384

9,566

79

547

1,097

1,181

Provision for bonuses

Non-current liabilities
Long-term loans payable
Provision for directors’ retirement benefits
Net defined benefit liability
Other

348

428

13,90911,72457,92860,899

Capital stock

701

768

Capital surplus

895

949

Retained earnings

12,833

16,169Treasury shares

(126)

(126)

Total shareholders’ equity

14,303

17,76126

36

Foreign currency translation adjustment

811Remeasurements of defined benefit plans

(136)

9

Total accumulated other comprehensive income

(102)

57

162

133

Non-controlling interests

1,099

1,187

Total net assets

15,464

19,14073,39280,039Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Subscription rights to shares

Total liabilities and net assets

9WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Millions of yen)
2017
(Jan. 1 – Dec. 31, 2017)

2016(Jan. 1 – Dec. 31, 2016)
Net sales
Cost of sales

94,33473,315

127,147
101,878

Gross profit

21,01925,268Selling, general and administrative expenses
Provision of allowance for doubtful accounts
Bad debts expenses
Directors’ compensations
Salaries and allowances
Provision for bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Welfare expenses
Depreciation
Rent expenses
Amortization of goodwill
Other

(32)
41
344
4,597
54
54
2
884
218
774
690
5,980

0
435
6,224
29
65
71
1,123
412
1,017
656
8,166

13,611

18,203

7,407

7,064

12
13

15
21

-

42

Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Subsidy income
Income of support to investment in property andequipment
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on retirement of non-current assets
Other
Total non-operating expenses

119

171

144

250

169
16
59

226
28
52

246

307

7,306

7,007

-

331
330

-

661

366

351

112

114

478

465

Profit before income taxes

6,827

7,204

Income taxes-current
Income taxes-deferred

2,819
(292)

2,449
24

Total income taxes

2,526

2,474

Profit

4,301

4,730

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on forgiveness of debts
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on valuation of shares of subsidiaries andassociates
Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent

10

108

117

4,192

4,612

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

Consolidated Statement of Comprehensive Income(Millions of yen)
2017
(Jan. 1 – Dec. 31, 2017)

2016(Jan. 1 – Dec. 31, 2016)
Profit

4,301

4,730

(5)

10

0

7

(53)

145

Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

(59)

163

4,241

4,893

4,133

4,774

108

119

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

11

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017(3) Consolidated Statement of Changes in Equity
2016 (Jan. 1 – Dec. 31, 2016)(Millions of yen)
Shareholders’ equity
Retained
Total shareholders’Capital surplus
Treasury sharesearnings
equityCapital stock
Balance at beginning of current
periodChanges of items during period

701

Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Stocks of parent company owned
by new consolidated subsidiaries
Increase by addition of newly
consolidated subsidiary
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

895

9,365

(126)

10,835

(763)

(763)

4,192

4,192
(0)

(0)

(0)

(0)

39

39

-

-

3,468

(0)

3,467

701

895

12,833(126)

14,303

Accumulated other comprehensive income
Total
Subscription
NonValuation
Foreign
Remeasurements accumulated
rights tocontrolling
difference on
currencyof defined
othersharesinterests
available-for- translation
benefit plans comprehensive
sale securities adjustment
incomeBalance at beginning ofcurrent period
Changes of items
during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesStocks of parent
company owned by
new consolidated
subsidiaries
Increase by additionof newly consolidated
subsidiary
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

31

7

(82)

(42)

129

974

Total net
assets11,897

(763)
4,192
(0)

(0)

39

(5)

0

(53)

(59)

33

124

98

(5)

0

(53)

(59)

33

124

3,566

26

8

(136)

(102)

162

1,099

15,464

12

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 20172017 (Jan. 1 – Dec. 31, 2017)(Millions of yen)

Capital stock
Balance at beginning of current
periodChanges of items during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners ofparentDisposal of treasury shares
Increase by addition of newly
consolidated subsidiary
Additional purchase of shares of
consolidated subsidiaries
Decrease in retained earnings
resulting from exclusion ofsubsidiaries from consolidation
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

Shareholders’ equity
Retained
Total shareholders’
Treasury shares
Capital surplus
earnings
equity

701

895

66

66

12,833(126)

14,303133(1,258)(1,258)

4,612

4,612
0

0

10

10

(12)

(12)
(28)

(28)

66

54

3,335

0

3,457

768

949

16,169(126)

17,761

Accumulated other comprehensive income
Total
Subscription
NonValuation
Foreign
Remeasurements accumulated
rights tocontrolling
difference on
currencyof defined
othersharesinterests
available-for- translation
benefit plans comprehensive
sale securities adjustment
incomeBalance at beginning ofcurrent period
Changes of items
during period
Issuance of newsharesDividends of surplus
Profit attributable toowners of parent
Disposal of treasury
sharesIncrease by additionof newly consolidated
subsidiary
Additional purchaseof shares of
consolidated
subsidiaries
Decrease in retained
earnings resulting
from exclusion ofsubsidiaries fromconsolidation
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

26

8

(136)

(102)

162

1,099

Total net
assets

15,464133(1,258)
4,612
0
10

(12)

(28)

10

3

145

159

(29)

88

218

10

3

145

159

(29)

88

3,675

36

11

9

57

133

1,187

19,14013

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017(4) Consolidated Statement of Cash Flows(Millions of yen)
2017
(Jan. 1 – Dec. 31, 2017)

2016(Jan. 1 – Dec. 31, 2016)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Loss on retirement of non-current assets
Loss on valuation of shares of subsidiaries and associates
Gain on forgiveness of debt
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in real estate for sale
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accrued expenses
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from withdrawal of time deposits
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Purchase of investments in non-consolidated subsidiary
Purchase of property, plant and equipment
Purchase of intangible assets
Payments for transfer of businessNet decrease (increase) in lease and guarantee deposits
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Redemption of bonds
Proceeds from issuance of common shares
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Net cash provided by (used in) financing activities

14

6,827
320
366
690
(17)

7,204
564
351
656
(0)

2

19

156
(12)
169
16
112
(1,297)(112)(10,298)
(583)
586
2,863
(75)
(284)
11
(167)
(3,571)368(3,644)

207
(15)
228
28
114
(330)
(1,777)
(197)
4,496
695
1,003
(1,287)37
11,99915(224)(4,381)
750
8,159

300

5

(38)

(2,022)(260)(1,127)
(323)
(27)
(95)
14
84
(1,473)

(276)
(901)
(59)
(194)
(155)
(15)
183
766
(2,668)10,453
7,185(6,864)
(11)
(0)
(763)
-

2,998
5,048
(9,606)
(23)
(245)
98
(1,258)
(9)

-

(60)

9,999

(3,058)

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

(Millions of yen)
2017
(Jan. 1 – Dec. 31, 2017)

2016(Jan. 1 – Dec. 31, 2016)
Effect of exchange rate change on cash and cash equivalents(5)

6

Net increase (decrease) in cash and cash equivalents

4,875

2,438

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly
consolidated subsidiary
Decrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation
Increase in cash and cash equivalents resulting from merger
with unconsolidated subsidiaries
Cash and cash equivalents at end of period

10,76915,764

119

68

-

(91)

-

47

15,764

18,227

15

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Additional Information
Application of Implementation Guidance on Recoverability of Deferred Tax Assets
Effective from 2017, the Company has applied the “Implementation Guidance on Recoverability of Deferred Tax
Assets” (Accounting Standards Board of Japan (ASBJ) Guidance No. 26, March 28, 2016).
Segment and Other Information
Segment Information
1. Overview of reportable segments
Segments used for financial reporting are the constituent units for which separate financial information isavailable and for which the Board of Directors performs periodic studies for the purposes of determining theallocation of resources and evaluating performance. Based on the characteristi cs of products and services, World
Holdings has established the following reportable segments: the factory business, technology business, R&D
business, sales & marketing business, real estate business, and information and telecommunications business.
Overview of each business segment is as follows.
(1) Factory Business: Temporary staffing for manufacturing and logistics, subcontracting, outsourced
government agency tasks, temporary staffing and employment agency services(2) Technology Business: Temporary staffing for engineers, outsourced software development, outsourced
repair and maintenance work, outsourced IT system development, repair of digital equipment,
temporary staffing for construction engineers(3) R&D Business: Temporary staffing for research personnel and clinical personnel, clinical researchoutsourcing(4) Sales & Marketing Business: Temporary staffing for store sales people and office workers(5) Real Estate Business: Sale of residences and residential building sites, condominium management andbrokerage sales, real estate consulting, design/construction/sale of detached houses, renovations, realestate brokerage services, rental property management, manufacture/sale/rental of prefabricated houses(6) Information and Telecommunications Business: Operation of call centers, sale of information andtelecommunications products, sale of office automation products

2. Calculation methods for net sales, profits or losses, assets, and other items for each reportable segment
The accounting methods for reportable segments are the same as those used for preparing the consolidated
financial statements.
Profits for reportable business segments are operating profit figures.
Inter-segment sales and transfers are based on market prices.

16

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

3. Information related to net sales, profits or losses, assets and other items for each reportable segment
2016 (Jan. 1 – Dec. 31, 2016)(Millions of yen)
Reportable segment
Information
Sales &
RealandFactory Technology R&D
Marketing
Estate Telecommuni- Subtotal
Business Business BusinessBusiness Businesscations
Business
Net sales
Sales to externalcustomers
Inter-segment
sales andtransfers

Other(Note 1)

Total

Amounts
shown onAdjustconsolidated
ments
financial(Note 2)statements(Note 3)30,111

10,334

5,533

5,654

34,481

7,742

93,858476

94,334-

94,334

0

362

-

1

10

4

380

34

415

(415)

-

Total

30,112

10,697

5,533

5,656

34,491

7,747

94,238511

94,749(415)

94,334

Segment profit

2,080

1,015

571

296

5,171

244

9,380

17

9,398

(1,990)7,407

Segment assets

4,658

2,097

1,101

944

54,6183,350

66,769152

66,922

6,470

73,392

2

9

2

1

143

52

212

1

213

107

320

-

-

-

-

502

8

510

-

510

179

690

-

-

-

-

-

2

2

-

2

364

366

1

183

2

9

993

112

1,302

1

1,303

314

1,618

Other items
Depreciation
Amortization of
goodwill
Impairment loss
Increase inproperty, plantand equipment
and intangible
assets

Notes:

1. “Others” represent businesses not included in a reportable segment and includes outsourced government agency
tasks, a personal computer school and other services.
2. Contents of adjustments are as follows.
(1) The -1,990 million yen adjustment to segment profit includes elimination for inter-segment transactions of 20
million yen, and -2,010 million yen in corporate expenses that cannot be allocated to any of the reportablesegments. Corporate expenses mainly consist of general and administrative expenses that are not attributable
to any of the reportable segments.
(2) The 6,470 million yen adjustment to segment assets is corporate assets that are no t allocated to any of thereportable segments. Corporate assets mainly consist of the Company’s surplus funds (cash and deposits).
(3) The 107 million yen adjustment to depreciation is related to corporate assets that are not allocated to any of
the reportable segments.
(4) The 179 million yen adjustment to amortization of goodwill is not allocated to any of the reportable segments.
(5) The 364 million yen adjustment to impairment loss is related to corporate assets that are not allocated to anyof the reportable segments.
(6) The 314 million yen adjustment to increase in property, plant and equipment and intangible assets is capital
expenditures that are not allocated to any of the reportable segments.
3. Segment profits are adjusted to be consistent with operating profit shown on the consolidated statement ofincome.

17

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 20172017 (Jan. 1 – Dec. 31, 2017)(Millions of yen)
Reportable segment
Information
Sales &
RealandFactory Technology R&D
Marketing
Estate Telecommuni- Subtotal
Business Business BusinessBusiness Businesscations
Business
Net sales
Sales to externalcustomers
Inter-segment
sales andtransfers

Other(Note 1)

Total

Amounts
shown onAdjustconsolidated
ments
financial(Note 2)statements(Note 3)41,654

12,155

6,489

5,741

49,0809,167

124,2902,856

127,147-

127,147

0

476

-

525

21

10

1,034

82

1,116

(1,116)-

Total

41,655

12,632

6,489

6,267

49,101

9,178

125,324

2,939

128,263(1,116)

127,147

Segment profit

2,587

1,263

634

219

4,635

25

9,365

(272)

9,093

(2,029)7,064

Segment assets

6,516

2,450

1,295

751

53,113

3,631

67,757

1,914

69,671

10,36780,039

6

16

4

2

222

58

312

131

443

120

564

1

-

-

-

571

9

582

61

644

12

656

-

-

-

-

-

2

2

348

351

-

351

5

4

43

1

542

224

821

76

897

191

1,089

Other items
Depreciation
Amortization of
goodwill
Impairment loss
Increase inproperty, plantand equipment
and intangible
assets

Notes:

1. “Others” represent businesses not included in a reportable segment and includes the operation and management ofagricultural parks, a personal computer school, the production of websites and other services.
2. Contents of adjustments are as follows.
(1) The -2,029 million yen adjustment to segment profit includes elimination for inter-segment transactions of 0
million yen, and -2,028 million yen in corporate expenses that cannot be allocated to any of the reportablesegments. Corporate expenses mainly consist of general and administrative expenses that are not attributable
to any of the reportable segments.
(2) The 10,367 million yen adjustment to segment assets is corporate assets that are not allocated to any of thereportable segments. Corporate assets mainly consist of the Company’s surplus funds (cash and deposits).
(3) The 120 million yen adjustment to depreciation is related to corporate assets that are not allocated to any of
the reportable segments.
(4) The 12 million yen adjustment to amortization of goodwill is not allocated to any of the reportable segments.
(5) The 191 million yen adjustment to increase in property, plant and equipment and intangible assets is capital
expenditures that are not allocated to any of the reportable segments.
3. Segment profits are adjusted to be consistent with operating profit shown on the consolidated statement ofincome.

18

WORLD HOLDINGS CO., LTD. (2429) Financial Results for 2017

Per-share Information
(Yen)
2017
(Jan. 1 – Dec. 31, 2017)

2016(Jan. 1 – Dec. 31, 2016)
Net assets per share

850.001,059.91

Net income per share

250.92275.35

Diluted net income per share

248.30270.68

Note: Basis for the calculation of net income per share and diluted net income per share is as follows:
2016(Jan. 1 – Dec. 31, 2016)2017(Jan. 1 – Dec. 31, 2017)

Net income per share
Profit attributable to owners of parent (Millions of yen)Amount not attributable to common shareholders(Millions of yen)
Profit attributable to owners of parent applicable tocommon stock (Millions of yen)
Average number of common stock outstanding during theperiod (Shares)

4,192

4,612

-

-

4,192

4,612

16,707,781

16,750,222--

Diluted net income per share
Adjustment to profit attributable to owners of parent(Millions of yen)
Increase in number of common stock (Shares)

176,524

288,831[of which subscription rights to shares (Shares)][176,524][288,831]--

Summary of potentially dilutive shares not included in thecalculation of diluted net income per share due to theiranti-dilutive effect

Subsequent Events
Not applicable.

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

19