Consolidated Financial Results for the Second Quarter of 2018
(Six Months Ended June 30, 2018)[Japanese GAAP]
August 6, 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 filing of Quarterly Report:
August 10, 2018
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Yes (for institutional investors and analysts)
Holding of quarterly financial results meeting:(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Six Months of 2018 (January 1 to June 30, 2018)(1) Consolidated results of operations
Net sales
Million yen(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent

Operating profit%

Million yen%

Million yen

Six months ended Jun. 30, 2018
64,37913.2
2,005(32.8)
Six months ended Jun. 30, 2017
56,853
36.6
2,981
41.2
Note: Comprehensive income (millions of yen)Six months ended Jun. 30, 2018:
Six months ended Jun. 30, 2017:
Net income per share
Six months ended Jun. 30, 2018
Six months ended Jun. 30, 2017%

Million yen

2,001 (32.2)
2,950
41.3
1,132 (down 49.3%)
2,235 (up 82.2%)

1,079
2,061

%

(47.6)
71.8

Diluted net income per share

Yen

Yen

64.15
123.2663.08
121.31(2) Consolidated financial position
Total assets

Net assets

Million yen

Net assets per share

Equity ratio

Million yen%

Yen

1,040.88
22.0
1,059.91
22.3
As of Dec. 31, 2017: 17,818

As of Jun. 30, 2018
79,52018,891
As of Dec. 31, 201780,03919,140
Reference: Shareholders’ equity (millions of yen)
As of Jun. 30, 2018: 17,514

2. Dividends
1Q-endDividends per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

2017
0.00
2018
0.00
2018 (forecast)
Note: Revisions to the most recently announced dividend forecast: None

-

82.70

82.70

-

82.80

82.80

3. Consolidated Forecast for 2018 (January 1 to December 31, 2018)
Net sales
Million yen

Operating profit%

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

Ordinary profit%

Million yen

Full year
145,137 14.1
7,288
3.2
7,083
Note: Revisions to the most recently announced consolidated forecast: None%

Million yen

%

Yen

1.1

4,635

0.5

275.73

* Notes(1) Changes in significant subsidiaries during the period (change in scope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to the section “2. Quarterly Consolidated Financial Statements and Notes, (4) Notes to Quarterly
Consolidated Financial Statements, Application of Special Accounting Methods for Presenting Quarterly Consolidated
Financial Statements” on page 13 for further information.

(3) 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

(4) Number of shares issued (common stock)1) Number of shares issued at the end of the period (including treasury shares)
As of Jun. 30, 2018:16,947,300 shares

As of Dec. 31, 2017:16,932,500 shares

As of Dec. 31, 2017:

120,846 shares

2) Number of treasury shares at the end of the period
As of Jun. 30, 2018:

120,876 shares

3) Average number of shares during the period
Six months ended Jun. 30, 2018:16,820,496 shares

Six months ended Jun. 30, 2017:16,720,552 shares* The current financial report is not subject to quarterly review by certified public accountants or auditing firms.
* 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. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated
Forecast and Other Forward-looking Statements” on page 6 for forecast assumptions and notes of caution for usage.

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

5(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

6

2. Quarterly Consolidated Financial Statements and Notes

7(1) Quarterly Consolidated Balance Sheet

7(2) Quarterly Consolidated Statements of Income and Comprehensive Income

9

Quarterly Consolidated Statement of Income
For the Six-month Period

9

Quarterly Consolidated Statement of Comprehensive Income
For the Six-month Period

10(3) Quarterly Consolidated Statement of Cash Flows

11(4) Notes to Quarterly Consolidated Financial Statements

13

Going Concern Assumption

13

Significant Changes in Shareholders’ Equity

13

Changes in Significant Subsidiaries during the Period

13

Application of Special Accounting Methods for Presenting
Quarterly Consolidated Financial Statements

13

Segment Information

13

1

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of 2018, although the Japanese economy continued to grow, the improvement in the business climate
slowed because of the rising cost of crude oil and other raw materials and other reasons. There are also concerns
about trade friction. The economic outlook is uncertain as a result. In the labor market, the job
openings-to-applicants ratio surpassed the previous record set during Japan’s asset bubble to reach an all -time highof 1.62 in June 2018. This demonstrates that the labor shortage at companies continues to be severe.
In the core Human Resources and Education Business, the operating environment is changing due to two events.
One is the first application in April 2018 of a provision in the amended Labor Contracts Ac t that requires employers
to convert fixed-term employees who have completed five years of employment in this status to permanent
employees. Second is the September 2018 deadline for the shift to a licensing system for temporary staffing
companies that placed workers for a maximum of three years. This licensing system is the primary element of theamended Worker Dispatching Act. The rising job openings-to-applicants ratio is also influencing the businessclimate. Due to this situation, for their recruitment needs, companies are becoming increasingly dependent on
temporary staffing companies capable of providing reliable services that include strict compliance with laws andregulations. Companies in the human resources and education sector are adapting to these changes while taking evenmore actions on their own to become more competitive. For example, companies are focusing on quickly supplying
large numbers of workers, training employees and other distinctive strengths that can set them apart fromcompetitors. As a result, Japan’s human resources and education industry is beginning to make a significant shift to aphase of maturity.
Based on its “one-stop service” strategy, World Holdings (hereinafter, “the Company”) covers many categories ofthe manufacturing sector and has established a sound organization of well-trained people and a framework formoving these people to different assignments. The consistent ability to meet customers’ requirements by using thesestrengths has earned an excellent reputation that has made a big contribution to growth of the World HoldingsGroup.
In the Real Estate Business, the Tokyo area condominium market, which is the primary market for this business,remained strong. In the newly constructed condominium category, the number of condominium units newly listed
for sale in June was 16.4% higher than in June 2017 and the average price per square meter increased 3.7%. During
the first half of 2018, with the support of extensive and effective marketing activities, this business post ed sales andearnings that exceeded the initial plan by completing sales of units with speed and flexibility in relation to the plan.
In the Information and Telecommunications Business, where Japan’s mobile phone market has reached maturity,
initiatives are under way to set the stage for growth in 2019 and afterward. The goal is to build a base for launching
new products, businesses and other activities while retaining our strategy of establishing dominant positions in ourtargeted market sectors.
In the first half of 2018, net sales increased 13.2% year on year to 64,379 million yen. Operating profit decreased
32.8% to 2,005 million yen, ordinary profit decreased 32.2% to 2,001 million yen, and profit attributable to ownersof parent decreased 47.6% to 1,079 million yen.
Results by business segment are described below.
Factory Staffing BusinessFirst half sales in this segment increased significantly mainly because of higher sales in the machinery, logistics, andelectrical and electronic products sectors.
We used two-way matching in order to achieve the best possible matching of the requirements of client companies
and the people we assign to projects. By using this approach, we recruited hundreds of people who can be moved
easily from one assignment to another prior to the need for these workers. This business also has many business sitesthat perform outsourced manufacturing processes. We can supply temporary workers who can meet the requirementsof each project after only about three months of preliminary training. During the first half, this business also
improved its workforce retention rate and quickly started large projects. All these activities produced benefits asplanned and enabled this business to add more success stories.

2

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

We have a dominant position in temporary staffing for logistics companies. Supporting this position are anorganization that can control a large number of partner companies and a workforce of thousands. For more growth,
we have training programs for specific job categories and levels. By using this training to increase the number of
mid-level management personnel, we completed the start-up of operations at new business locations acquired in thisperiod with no problems. This made a big contribution to the addition of thousands of people to our temporary
placement workforce.
Recruiting activities are the highest priority of this business. We hired new graduates and the number of people
registered on our Job Paper website is now more than 57,000. In addition, there was progress wi th building a soundframework for recruiting processes to reflect the steadily growing scale of our recruiting operations. These activities
made it possible to conduct recruiting operations with outstanding efficiency and quality.
As a result, sales were 23,332 million yen, up 25.3% year on year and segment profit decreased 0.7% to 1,392
million yen.
Technology Staffing BusinessThis business continued to grow in the first half, mainly in the machinery, automobile, and information andtelecommunication services sectors.
In response to Japan’s severe shortage of engineers, we have been making investments to build an infrastructure fortraining employees to become engineers. With the support of Advan Inc., we provide Java programming and Python
training. We also operate a Design Center where people receive training involving CATIA and other 3D -CAD skills.
In 2018, we started operating a Production Engineering Center that is dedicated solely to this field of engineering.
These activities contributed to growth in orders involving production engineering.
SAIHI JOHO SERVICE CO., LTD. (SAINS) was acquired for the purpose of giving the system design development
section a stronger framework for performing outsourced work. SAINS is included in the consolidated statement ofincome beginning with the second quarter of the current fiscal year.
A record-high of more than 100 new graduates were hired during the first half of 2018 and this business used
upgraded content on social networking services and other channels to recruit experienced professionals. Overall,
recruiting activities made a contribution to growth in the workforce and sales.
Sales were 7,029 million yen, up 17.2% year on year and segment profit decreased 6.0% to 604 million yen.
R&D Staffing BusinessIn this business, we are working on establishing a prominent position in business domains with substantial added
value. Most of all, we are focusing on R&D staffing involving chemicals, synthetic chemicals and other fields where
only the Company can supply qualified personnel. To give our R&D staffing workforce more training for the basic
knowledge they require, we created our own education program for statistics, analysis and other subjects. We also
have training to give people skills that increase the loyalty of our client companies. Due to these activities, thisbusiness made progress with creating a workforce of research personnel with excellent value for our clients and withthe placement of these people in R&D fields where we can charge higher staffing servi ce rates.
During the first half of 2018, the recruiting operations of this business continued to perform well. By using
innovative recruiting plans, we hired many highly skilled research personnel that included about 70 new university
graduates, mostly people with a master’s or PhD degree.
We are currently making preparations to start a business for outsourced R&D services. One step was the 2017 startof joint research with Kyoto University and Osaka Prefecture University. Next, we plan to expand joint res earch
activities to include other universities.
DOT WORLD CO., LTD. is a clinical research outsourcing company that performs clinical trials for clientcompanies. In response to its failure to receive a large clinical research outsourcing contract and othe r events, thiscompany made investments for reexamination of its employee training programs and organization even though theywould have a negative impact on segment profit. The result was a temporary decrease in earnings at this company.
Sales were 3,336 million yen, up 8.2% year on year and segment profit decreased 8.8% to 247 million yen.

3

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

Sales & Marketing Staffing BusinessThis business continued business model reforms. There are also up-front investments to reinforce administrative
sections and make other improvements. All these actions are aimed at establishing a powerful foundation for growthstarting in 2019.
Sales were 1,847 million yen, down 39.1% year on year and segment loss was 60 million yen, compared with asegment profit of 138 million yen in the first half of 2017.
Real Estate BusinessIn this business, we have established a stable business portfolio and a framework for operating in all areas of Japan.
This makes it possible to perform marketing activities that precisely match the character istics of regional markets
and the properties we sell. Another benefit is the ability to reach decisions in a more timely and accurate manner.
Especially for development projects, which have particularly high volatility, we are able to make decisions about thetiming and profitability of property sales with greater accuracy. During the first half of 2018, we used thesecapabilities for speed and flexibility for the closing of property sales, which resulted in sales and earnings that werehigher than we had planned.
The renovation business, which produces a steady income stream, continues to grow consistently. The performanceof this business has benefited from the success of branding activities centered on Mikuni Co., Ltd. and of the growthof activities to more areas of Japan. As a result, there were increases in the number of properties sold, sales andearnings.
In 2019, restrictions on bringing people to Japan for training are expected to be eased. The Real Estate Business isworking with the Human Resources and Education Business to gather information about reduced limitations on
foreign workers in Japan. These activities may result in the creation of a new business model.
The performance of each category of this segment was as follows.
The real estate development business completed the sale of 35.5 condominium units and sold five sites for business
use, resulting in property sales of 8,844 million yen. Sales from real estate brokerage and other activities totaled
1,266 million yen. At Residential Musashigaoka, a condominium building where the closing of sales is scheduled tostart in the third quarter of 2018, the number of sales contracts signed has been higher than planned.
In the renovation business, the number of residences sold increased by about 50% from one year earlier to 327
during the first half of 2018. Sales were 6,604 million yen.
In the detached house business, Hoei Construction Co., Ltd. has expanded its operations from Hokkaido to include
the Sendai area. This company completed the sale of 122 custom-build houses and recorded sales of 3,017 million
yen.
In the prefabricated house business, Omachi World Co., Ltd. has a rental business and sells prefabricated houses.
Sales totaled 685 million yen.
Sales were 20,416 million yen, down 0.9% year on year and segment profit decreased 39.2% to 784 million yen.
Information and Telecommunications Business
The structure of Japan’s telecommunications market is changing rapidly. The maturity of the mobile phone market
and government measures to increase competition are two causes. Other sources of change include the increasing
variety of options for customers as rate and service packages become more diverse and the preference of consumers
for lower-priced products and services. We reinforced the sales activities of all stores, especially stores that wereopened in 2017, and increased measures to sell accessories and other products. Although these activities resulted inhigher sales, earnings decreased as this business continued to make investments for making every store the leader in
its home market. Investments are aimed at improving customer satisfaction, strengthening sales promotion activities
to earn a better reputation for stores, and increasing productivity by training store personnel.
This business also includes services for cost cutting primarily at small and midsize companies. Numerous
preparations are under way for the growth of this business in 2019. We are expanding the lineup of energy -efficient
products and other new products, extending operations to more areas of Japan, covering more categories of callcenters and taking other actions.
4WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

Sales were 6,741 million yen, up 59.9% year on year and segment profit decreased 51.1% to 73 million yen.
OthersAt Advan Inc., which operates PC schools, the creative sector performed well and web design, online sales and otheractivities recorded solid sales and earnings. Advan’s performance continues to reflect the substantial synergies with
the Human Resources and Education Business. In addition to its existing training programs, Advan has started
offering an e-learning education program. These activities made a contribution to improving the skills of engineers,
mainly in the Technology Staffing Business.
At Farm Co., Ltd., which operates agricultural parks, and its affiliate, attendance at these parks was 475,000 in thefirst half of 2018, about the same as one year earlier. Attendance was unchanged despite the negative impact of
unfavorable weather of an unexpectedly severe magnitude. This impact was offset by ongoing activities to upgradepark facilities and take other actions to revitalize agricultural parks. At Sakai Greenery Museum Harvest Hill, sales
and earnings were both higher than planned. At the end of June, Sylvanian Park opened at Comorebi Ibara ido Forest
in Ibaraki prefecture as a joint operation with Epoch Co., Ltd. in order to make this forest park even more appealing
during the peak summer season. Crowdeight co.,Ltd., which oversees the operation of agricultural parks, became aconsolidated subsidiary in the second quarter of 2018 because of its increasing significance.
Sales were 1,675 million yen, up 27.6% year on year and there was a segment loss of 130 million yen, comparedwith a segment profit of 70 million yen in the first half of 2017.
(2) Explanation of Financial Position
AssetsTotal assets decreased 519 million yen from the end of 2017 to 79,520 million yen at the end of the second quarter of
2018. This was mainly due to a decrease of 840 million yen in cash and deposits, an increase of 1,370 million yen inreal estate for sale, a decrease of 1,307 million yen in real estate for sale in process and an increase of 186 million
yen in property, plant and equipment.
Liabilities
Total liabilities decreased 271 million yen from the end of 2017 to 60,628 million yen. This was mainly due to anincrease of 839 million yen in short-term loans payable, decreases of 518 million yen in income taxes payable and644 million yen in long-term loans payable.
Net assets
Net assets decreased 248 million yen from the end of 2017 to 18,891 million yen mainly due to a 314 million yen
decrease in retained earnings.
Cash Flows
Cash and cash equivalents at the end of the first half of 2018 decreased 840 million yen from the end of 2017 to
17,387 million yen.
Cash flows from operating activities
Net cash provided by operating activities was 1,129 million yen. Main positive factors include profit before income
taxes of 1,975 million yen, a 488 million yen increase in accrued expenses and income taxes refund of 1,301 million
yen. Major negative factors include a 403 million yen increase in inventories, a 156 million yen decrease in notes
and accounts payable-trade and income taxes paid of 1,318 million yen.
Cash flows from investing activities
Net cash used in investing activities was 664 million yen. Main positive factors include proceeds from purchase ofshares of subsidiaries resulting in change in scope of consolidation of 39 million yen. Main negative factors include
payments of 70 million yen for purchase of investments in non-consolidated subsidiary and 504 million yen forpurchase of property, plant and equipment and 63 million yen for purchase of intangible assets.
5

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

Cash flows from financing activities
Net cash used in financing activities was 1,575 million yen. Main positive factors include proceeds of 2,139 million
yen from long-term loans payable. Main negative factors include repayments of long-term loans payable of 1,340
million yen and cash dividends paid of 1,390 million yen.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
The Company maintains its full-year consolidated forecast that was announced in the “Consolidated Financial
Results for 2017” on February 13, 2018.

6

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Second quarter of 2018
(As of Jun. 30, 2018)2017(As of Dec. 31, 2017)
AssetsCurrent assets
Cash and deposits

18,227

17,387

Notes and accounts receivable-trade

10,204

10,352889

1,271

Real estate for sale

12,324

13,695Work in process

117

99

24,68423,377

416

423

Other

3,499

3,576

Allowance for doubtful accounts

(48)

(50)

70,315

70,134

4,707

4,893

1,552

1,252

368

324

1,921

1,577

Investment securities

821

602

Deferred tax assets

659

660

Lease and guarantee deposits

847

864

Other

845

865

Allowance for doubtful accounts

(77)

(77)

Total investments and other assets

3,094

2,915

9,724

9,386

80,03979,520Notes and accounts payable-trade

1,286

1,617

Accounts payable-real estate

1,187

735

Short-term loans payable

33,09433,934

Accrued expenses

5,827

6,351

Income taxes payable

1,509

991

Accrued consumption taxes

1,323

965

Provision for bonuses

72

147

Provision for directors’ bonuses

-

0

Other

4,874

4,832

Total current liabilities

49,17549,575

9,566

8,921

547

590

1,181

1,276

428

264

11,724

11,05260,89960,628Merchandise and finished goods

Real estate for sale in process
Deferred tax assets

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets

Total non-current assets
Total assets
Liabilities
Current liabilities

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

7

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

(Millions of yen)
Second quarter of 2018
(As of Jun. 30, 2018)2017(As of Dec. 31, 2017)
Net assets
Shareholders’ equity
Capital stock

768

778

Capital surplus

949

959

Retained earnings

16,16915,854

Treasury shares

(126)

(126)

Total shareholders’ equity

17,761

17,465

Valuation difference on available-for-sale securities

36

29

Foreign currency translation adjustment

115Remeasurements of defined benefit plans

914

Accumulated other comprehensive income

57

48

Subscription rights to shares

Total accumulated other comprehensive income

133

127

Non-controlling interests

1,187

1,250

Total net assets

19,14018,89180,03979,520Total liabilities and net assets

8

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statement of Income)(For the Six-month Period)(Millions of yen)First six months of 2018
(Jan. 1 – Jun. 30, 2018)

First six months of 2017
(Jan. 1 – Jun. 30, 2017)
Net sales

56,85364,379

Cost of sales

45,45552,629Gross profit

11,39811,750

Selling, general and administrative expenses

8,416

9,744

Operating profit

2,981

2,005

11

19

Other

115

102

Total non-operating income

126

121

Interest expenses

110

99

Other

46

26

Non-operating income
Subsidy income

Non-operating expenses

Total non-operating expenses

157

125

2,950

2,001

Gain on forgiveness of debts

330-

Total extraordinary income

330-

Ordinary profit
Extraordinary income

Extraordinary losses
Impairment loss-

11

Loss on disaster

-

14

-

25

Profit before income taxes

Total extraordinary losses

3,281

1,975

Income taxes

1,073

832

Profit

2,207

1,143

146

64

2,061

1,079

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

9

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

(Quarterly Consolidated Statement of Comprehensive Income)(For the Six-month Period)(Millions of yen)First six months of 2018
(Jan. 1 – Jun. 30, 2018)

First six months of 2017
(Jan. 1 – Jun. 30, 2017)
Profit

2,207

1,143

11

(6)

Foreign currency translation adjustment

0(8)Remeasurements of defined benefit plans, net of tax

15

4

Total other comprehensive income

27

(11)

2,235

1,132

2,089

1,069

145

62

Other comprehensive income
Valuation difference on available-for-sale securities

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

10

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018(3) Quarterly Consolidated Statement of Cash Flows(Millions of yen)First six months of 2018
(Jan. 1 – Jun. 30, 2018)

First six months of 2017
(Jan. 1 – Jun. 30, 2017)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill

3,281

1,975

244

329

-

11

320

348

0

0

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in net defined benefit liability

34

35

109

76

Interest and dividend income

(10)

(6)

Interest expenses

112

99

Loss on retirement of property, plant and equipment

199Gain on forgiveness of debt

(330)

-

Decrease (increase) in notes and accounts receivable-trade

(249)

(27)

Decrease (increase) in inventories

(47)

(403)

Decrease (increase) in real estate for sale

1,332

(62)

(23)

(156)

(1,134)81

Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in deposits received
Increase (decrease) in accrued expenses

215

488

Increase (decrease) in other current liabilities

(856)

(335)

Other, net(454)(1,223)

Subtotal

2,562

1,239

8

4

Interest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes refund

(106)

(97)

(1,814)(1,318)

750

1,301

1,401

1,129

-

0

-

39

(2,022)

-

(26)

(70)

Purchase of property, plant and equipment

(316)

(504)

Purchase of intangible assets

(42)

(63)

Payments for transfer of business

(77)

-

Payments of loans receivable

(13)

(0)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from withdrawal of time deposits
Proceeds from purchase of shares of subsidiaries resulting
in change in scope of consolidation
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Purchase of investments in non-consolidated subsidiary

Collection of loans receivable170

1

Net decrease (increase) in lease and guarantee deposits

(54)

(17)

Other, net

369

(49)

(2,012)(664)

Net cash provided by (used in) investing activities

11

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

(Millions of yen)First six months of 2018
(Jan. 1 – Jun. 30, 2018)

First six months of 2017
(Jan. 1 – Jun. 30, 2017)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

2,896

(706)

Proceeds from long-term loans payable

3,634

2,139

Repayments of long-term loans payable(4,305)(1,340)

Repayments of lease obligations

(13)

(10)

Redemption of bonds

(125)

(262)

33

14

Proceeds from issuance of common shares
Purchase of treasury shares-(0)(1,258)(1,390)

Dividends paid to non-controlling interests
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation

(9)

-

-

(18)

Net cash provided by (used in) financing activities

852(1,575)

0

(6)

241

(1,116)

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 from exclusionof subsidiaries from consolidation
Increase in cash and cash equivalents resulting from merger
with unconsolidated subsidiaries

15,764

18,227

68

276

(91)

-

47

-

Cash and cash equivalents at end of period

16,031

17,387

Cash dividends paid

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

12

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity

Not applicable.
Changes in Significant Subsidiaries during the Period
Not applicable.
The following information is provided even though these four actions were not a change in a significant subsidiary.
SAIHI JOHO SERVICE CO., LTD. became a consolidated subsidiary in the first quarter of 2018 following theacquisition of its shares by the Company on February 28, 2018.
NIKKEN SERVICE CO., LTD., which was a consolidated subsidiary in 2017, is no longer included in the
consolidated financial statements because this company was dissolved following its absorption and merger withconsolidated subsidiary NIKKEN TECHNO CO., LTD. on January 1, 2018.
WORLD STAFFING CO., LTD., which was a non-consolidated subsidiary in 2017, is included in the consolidated
financial statements starting in the first quarter of 2018 because of the increasing significance of this compan y.
Crowdeight co.,Ltd., which was a non-consolidated subsidiary in 2017, is included in the consolidated financial
statements starting in the second quarter of 2018 because of the increasing significance of this company.
Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements
Calculation of tax expense
The tax expenses are calculated by first reasonably estimating the effective tax rate after the application of tax effectaccounting with respect to profit before income taxes for the fiscal year in which the quarter under review falls, andmultiplying that rate by the profit before income taxes for the quarter under review. However, the Company uses
legally stipulated effective tax rates to calculate tax expenses for cases in which using estimated tax rates gives a
noticeably irrational result.
Segment Information
I. First six months of 2017 (Jan. 1 – Jun. 30, 2017)
1. Information related to net sales and profit or loss for each reportable segment(Millions of yen)
Reportable segment
Information
Sales &
Factory Technology R&D
andMarketing Real Estate
Staffing
Staffing Staffing
Telecommuni- Subtotal
Staffing
Business
Business Business Businesscations
Business
Business

Net sales
Sales toexternalcustomers
Inter-segment
sales andtransfers
Total
Segment profit

Others(Note 1)

Total

Amounts
shown onAdjustquarterly
ments consolidated(Note 2) statement ofincome(Note 3)

18,614

5,996

3,084

3,033

20,5944,217

55,5401,312

56,853-56,853

0

225

-

253

8

4

491

33

524

(524)

-

18,614

6,221

3,084

3,286

20,602

4,222

56,032

1,345

57,378(524)

56,853

1,401

642

271

138

1,290

150

3,894

70

3,964

(982)

2,981

Notes: 1. “Others” represent businesses not included in reportable segments and include agricultural park business, outsourced
government agency business, education and training business and the operation of personal computer schools and otherservices.
2. The -982 million yen adjustment to segment profit includes elimination for inter-segment transactions of -3 million yen,and -979 million yen in corporate expenses that cannot be allocated to any of the reportable segments. Corporate

13

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the Second Quarter of 2018

expenses mainly consist of general and administrative expenses that are not attributable to any of the reportablesegments.
3. Segment profit is adjusted to be consistent with operating profit shown on the quarterly consolidated statement ofincome.

2. Information related to impairment losses on non-current assets or goodwill, etc. for each reportable segment
Impairment losses related to non-current assets
Not applicable.
Significant change in goodwill
There is no significant change.
Significant gain on bargain purchaseNot applicable.
II. First six months of 2018 (Jan. 1 – Jun. 30, 2018)
1. Information related to net sales and profit or loss for each reportable segment(Millions of yen)
Reportable segment
Information
Sales &
Factory Technology R&D
andMarketing Real Estate
Staffing
Staffing Staffing
Telecommuni- Subtotal
Staffing
Business
Business Business Businesscations
Business
Business

Others(Note 1)

Total

Amounts
shown onAdjustquarterly
ments consolidated(Note 2) statement ofincome(Note 3)

Net sales
Sales toexternal
23,332
7,029 3,336
1,847 20,416
6,741
62,704
1,675 64,379
64,379customers
Inter-segment
sales and
233
46
7
9
296
43
340
(340)
transfers
Total
23,332
7,262 3,336
1,893 20,424
6,751
63,001
1,719 64,720(340)
64,379Segment profit
1,392
604
247
(60)
784
73
3,041
(130)
2,910
(905)
2,005
(loss)
Notes: 1. “Others” represent businesses not included in reportable segments and include the operation and management ofagricultural parks, the operation of personal computer schools, the production of websites and other services.
2. The -905 million yen adjustment to segment profit (loss) includes elimination for inter-segment transactions of 25
million yen, and -931 million yen in corporate expenses that cannot be allocated to any of the reportable segments.
Corporate expenses mainly consist of general and administrative expenses that are not attributable to any of thereportable segments.
3. Segment profits (loss) are adjusted to be consistent with operating profit shown on the quarterly consolidated statementof income.

2. Information related to impairment losses on non-current assets or goodwill, etc. for each reportable segment
Impairment losses related to non-current assets
Not applicable.
Significant change in goodwill
There is no significant change.
Significant gain on bargain purchaseNot applicable.
This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been prepared inaccordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an
English translation.

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