Business Report 2018
January 1

December 31, 2018

To Our Stakeholders

Creating the “Ways We Live”

01

Interview with the President

Continuing to pursue
new “ways we live”
by refocusing
on the core manufacturingsectorConsolidated Financial Results
05 Strategy for Human Resources
and Education Business
07 Business Segment Overview
09 Topics
11 Corporate Data/Stock Information
04

Securities Code: 2429

Interview with the President
FY12/2018: Overview of Business Activities

We achieved record-high consolidated
net sales because of the strong
performance of the core Human
Resources and Education Business.
Our profits were generally as expected
despite expenses associated with upfront investments.

Eikichi Iida
Chairman and President

Another strong performance by the core Human Resources
and Education Business made a big contribution to our growthin fiscal 2018. Consolidated net sales rose to an all-time high.
There were small increases in profits because of investments
we made as planned for our next stage of growth, while they
were almost in line with our forecasts.
In Japan’s HR services industry, on which our Human
Resources and Education Business is based, competition in
the past has been centered on the ability to gather people. But
the industry is now undergoing a realignment due to changes
in the business climate, including amendments to laborrelated laws and regulations to deal with issues created by
Japan’s falling working-age population, and laws for workingstyle reforms, which are to be enacted in April 1, 2019,associated with the goal of creating a society where all

Continuing to pursue
new “ways we live” by refocusing
on the core manufacturing sector
WORLD HOLDINGS (WH) is returning its focus to human resource services in the manufacturingsector. Growth strategies and key initiatives are aimed at creating job opportunities for everyone andrealizing the full potential of every job. Balance will also be vital to our sustained growth. In thisinterview, Chairman Iida explains how we plan to accomplish these goals.

01

citizens can actively participate. Measures to increase thenumber of foreign workers are also altering market conditions.
To succeed in this environment, major HR services companies
have started to use innovative business strategies in order todifferentiate their services from their competitors.
Manufacturing sector is the nucleus of our Human
Resources and Education Business. Here, our goal is to servea broader range of categories by adding new and growing
manufacturing sectors. Fifth-generation mobile
communications (5G), self-driving vehicles and factory
automation are prime examples. We are also shifting ourservices from the temporary staffing format to a subcontracting(contracted outsourcing) format. Making this change will give
us more contracts with long-term stability.
Research and technology positions that require advanced
skills are another priority. We aim to establish ourselves as asource of a highly skilled team of research scientists and othertechnicians. We are upgrading our training programs for thesepeople while expanding our coverage of industries that
require specialists in chemicals, synthetic chemicals, data
analysis and other fields. Now we are taking actions to further
differentiate ourselves from our competitors. This involves atransition to co-sourcing*1 that utilizes the human resources
platform*2 that we established by using a variety of measures.
Our performance in the manufacturing sector was strong infiscal 2017 and 2018. However, uncertainty about the outlook
started increasing in the latter half of 2018 because of
U.S.-China trade war, declining smartphone-related
production and other events. Despite these challenges, ourexisting businesses continued growing on their own. I believe
this was the result of the strategic expansion of subcontracting
business sites and greater mobility of our people among
different assignments by adding clients in growing industries.
Furthermore, in the logistics sector*3, which is a market sector
we dominate, our horizontal expansion is progressing asplanned as we opened a new location. By meeting demand
for workers during the peak year-end season, our logistics
operations made a big contribution to fiscal 2018 financial
results.
*1. ‌An outsourcing format where a service provider serves as a trusted partner ofclients by increasing involvement with business processes and sharing thebenefits of this collaboration with the clients*2. ‌A team of specialists for business sectors requiring the common technologies
and skills. For details, please refer to Strategy for the Human Resources andEducation Business 1 on page 5.
*3. ‌For details on business development in the logistics field, please refer toStrategy for the Human Resources and Education Business 2 on page 6.

Progress in New Medium-Term
Management Plan 2021

Refocusing on the core manufacturingsector; moving faster to further
upgrade the ability to gather people
and improve the ability to attract people
The New Medium-Term Management Plan 2021 covers the
five-year period that ends with fiscal 2021. At the heart of thisplan is our new vision of “pursuing the ways we live at an evenhigher level.” Until now, recruiting, which is the ability to gather
people, was the key driver of growth in the HR services
industry. But now the manufacturing sector in Japan faces achronic labor shortage due to the structural problem of adeclining working-age population. Expenses to recruit people
are climbing as a result. Furthermore, heated recruiting
competition can make it impossible to hire new workers.
Under these circumstances, we divide our recruiting
capabilities into two elements: the ability to gather people andthe ability to attract people. We are making strategic
investments for progress in both of these elements.
During the new medium-term plan’s first two fiscal years weenhanced our ability to gather people by enlarging thebreadth of our business sector coverage. We also improved
our ability to attract people, which is linked to the power of ourbrand. However, more work for attracting people is needed,such as improvements to our training programs. The reason isthat we placed priority during these two fiscal years on growthin the manufacturing sector, where the supply of workers was
extremely tight.
Japan’s human resource services industry started to
weaken somewhat in the latter half of 2018. There is also an
increasing medium-term risk of an economic downturn inJapan. I do not anticipate any change in this situation. I
believe this challenging environment is actually an excellent
opportunity for stepping up our pace of activities for improving
our ability to attract people. Most of all, I want to accelerate
the reinforcement of our programs for helping current
employees to establish and achieve career goals.

[Strategic initiatives by going back to the basics]
In addition, we are growing in business domains where wecan differentiate ourselves, such as by sending teams for

FY12/2018 Results and FY12/2019 Forecasts
FY12/2018
Actual Results (Millions of yen)
Net sales

Human Resources andEducation Business
Real Estate BusinessInformation andTelecommunications Business

75,038Segment profit

4,964

Net sales

52,011

Segment profit

4,589

Net sales

12,376
3

Segment profit
Net sales

OthersSegment profit

Total

(270)

Net sales

142,894

Elimination or corporate(1,917)

Operating profit

7,370

FY12/2019
YoY (%)

+13.6
6.6

8.8

0.0

3,467

projects requiring advanced skills, and business domains withlarge-volume subcontracting. We will add a diverse array of
training schemes. Education to support a career change andtraining to upgrade existing technological expertise for current
workers, and “relearning” programs for people with noexperience are the examples of these schemes. Restructuring
our employee evaluation system is another important step. To
help accomplish these goals, we are building a database of
the skills of each individual in our workforce. Achieving thevisualization of our people will be instrumental to completing
our human resources platform.
Our position as a one-stop provider of services extending
from upstream to downstream processes in the
manufacturing sector is one of our most valuable strengths.
Clients can rely on us to send teams of workers withproduction technology, design and development, R&D andother advanced skills demanded by each project. To supply
these people, we must constantly upgrade their skills. Highly
accurate matching of a team’s skills with a client’s
requirements allows us to assemble teams that can perform
at an even higher level. Furthermore, we identify client andworker needs that are not readily visible and give people
effective training. The result is greater value of our people asindividuals with distinctive characteristics. By continuing to
improve our two-way matching capabilities, we plan toextend our operations to more market sectors.
In the manufacturing temporary staffing industry in Japan,
there have generally been almost no improvements concerning

02

Profit margin (%)—

5.2

Forecasts (Millions of yen)

Profit margin (%)

83,361

+5.5

5,617

+6.0

56,063

-1.0

2,753

+35.0

12,019

-85.1

157

+21.4

4,008

—

45

+12.4

155,452—(2,525)

+4.3

6,049

6.7

4.9

1.3

1.1

3.9

factory worker salaries and skills. Supplying more workers inorder to improve our short-term performance is not our only
goal. We are also dedicated to raising the salaries of factory
workers by upgrading their quality in order to give thesepeople opportunities to work for many more years.
This is why fiscal 2019 is a critical year for us. We arerefocusing on the core manufacturing sector to reexamine thisbusiness. I want us to do whatever is needed for taking on
initiatives that we could not adequately handle in prior fiscal
years.

[Achieving well-balanced management by aiming
for a suitable scale of operations]
Our goal is sustainable growth backed by a well-balanced
business portfolio. That means we need to aim for the best
possible profitability by reaching a suitable scale ofoperations, chiefly in our core businesses.
For example, in the manufacturing sector, the growth of our
Human Resources and Education Business may be slower
than at our competitors. Looking ahead, I expect annual net
sales growth of around 20%. For more growth, we must placepriority on building an organization for the next step after
outsourcing. Furthermore, I want to build a solid foundation fornext-generation business activities.
Well-balanced management will be particularly critical to thesuccess of our Real Estate Business. We started this businessin 2010, not long after the start of the global financial crisis.
This business accurately targeted opportunities created as theInterview with the President

Financial Highlights (FY12/2018)
real estate market recovered. The business has grown tobecome a significant profit center. In fiscal 2018, this businessposted net sales of about ¥52.0 billion and segment profit ofabout ¥4.6 billion.
Japan’s real estate market has been showing signs of anasset bubble during the past few years. As the graph below
shows, real estate profits have been consistently well above
our initial plan. We were able to sell real estate developments
at prices far higher than the cost of these properties. But thecost of acquiring properties has been rising and we adopted acautious stance in response. Our plan is to limit property
purchases for development projects until real estate prices
return to normal. Instead, we are increasing renovations andother recurring-revenue activities with the goal is establishing
the best overall balance. In the real estate development
sector, our goal of reducing our risk exposure bystrengthening projects that convert buildings to another use
and taking other actions.
For these reasons, we established a conservative 2019business plan for real estate. We will make accurate decisions
about the outlook, which is currently unclear, and use welltimed actions for more growth of this business.

Real Estate Business Initial Plans
and Actual Results
Left: Net sales/Initial plan
Net sales/Actual result
Right: Segment profit/Initial plan
Segment profit/Actual result(Millions of yen)

(Millions of yen)

60,0006,000

Asset bubble
conditions

5,000
4,000

40,000

3,000
2,000

20,000Initiatives for Creating New “Ways We Live”

A firm commitment to continue
challenging for creating the “way welive” by giving everyone anopportunity to work, enhance skills
and acquire knowledge throughrelearning
Japan has been actively making increasing use of foreign
workers as the country’s working-age population declines.
More than 10 years ago we started creating a scheme for
accepting foreign workers by using the foreign technical interntraining program. Japan is continuing to consider theestablishment of a framework for accepting more foreign
workers based on a medium- to long-term perspective.
In addition to the foreign intern program, which is intended
to use training programs for technology transfers that can
assist developing countries and regions, programs fordesignated skills will be newly established. We will take these
programs into consideration to aim for comprehensive
activities, including development of workers who haveadvanced expertise and professional skills to immediately
make a contribution and retention of ties with them after they
return to their home countries.
In Japan, there are large numbers of women and older
people who are not participating in the labor market. I want toutilize this enormous source of unused labor by creating jobs
for everyone and operating many types of training programs. I
firmly believe that our mission is to be a HR services company
that gives everyone the opportunity to work and is a source ofjobs that are stimulating and rewarding.
To make our new vision of “pursuing the ways we live at aneven higher level” a reality, we will continue to work on
establishing a framework that will create happiness of workers.
I would like to ask for your continued support from a mediumto long-term perspective.

142,894

Net sales

127,147
87,984

94,334

FY12/2015

FY12/2016

Operating profit
7,407

FY12/2017

7,370

millions YoY:of yen142,894

FY12/2018

millionsof yen

YoY:

7,064

7,370

FY12/2016

FY12/2017

FY12/2018

Ordinary profit
7,306

7,357

millionsof yen

YoY:

7,007

7,357

FY12/2016

Profit attributableto owners of parent

FY12/2017

FY12/2018

3,810

4,192

4,650
4,612

FY12/2019 (Forecast)

4.3%

FY12/2019 (Forecast)

5.0%
5,910

5,133

FY12/2015

155,452

6,049

5,137

FY12/201512.4%

millionsof yenYoY:

FY12/2019 (Forecast)

0.8%

4,650
3,672

1,000
0

FY12/2015

0
FY12/2014

FY12/2015

FY12/2016

FY12/2017

FY12/201803

FY12/2016

FY12/2017

FY12/2018

FY12/2019 (Forecast)Consolidated Financial Results
Consolidated Balance Sheet (Millions of yen)

Consolidated Cash Flows (Millions of yen)

AssetsLiabilities and net assets

Current assets

Non-current assets

18,227

Cash and deposits
Notes and accounts
receivable-trade
Real estate for salein process

Current liabilities
Net assets

80,03979,964
Cash and deposits
Notes and accounts
receivable-trade
Real estate for salein process

10,204
24,68470,315
Property, plant andequipment
Intangible assets
Investments andother assets

Property, plant andequipment
Intangible assets
Investments andother assets

3,094

9,724

80,03918,825

21,124

5,439
1,359

(7,538)Cash flows
from investing
activities

18,227

46,13049,175

Cash flows
from financing
activities

9,277

79,964

11,252

Cash andcash equivalents
at end of period

18,824(1,405)

11,485

11,724

2,856

22,347

19,1409,654

FY12/2017-end FY12/2018-end

Highlights

Cash flows
from operating
activities

Cash andcash equivalents
at beginning of period

70,309

4,707
1,921

Non-current liabilities

FY12/2017-end FY12/2018-end

FY12/2018

Total assets decreased ¥75 million from the end of fiscal 2017. Total liabilities decreased ¥3,283 million
compared to the end of fiscal 2017.

Highlights

Cash flows from operating activities were positive mainly due to profit
before income taxes, a decrease in real estate for sale and income
taxes refund. Cash flows from investing activities were negative
mainly for the purchase of property, plant and equipment. Cash flows
from financing activities were negative mainly for the repayment ofshort-term and long-term loans payable.

Net sales

Consolidated Statement of Income (Millions of yen)

142,894
Operatingprofit7,370

Net sales

127,147

Cost of sales

115,154
OperatingprofitOrdinary
profit

7,064

7,007

Non-operating
incomeOrdinary
profit267

Extraordinary
income

112

7,357

7,379

Non-operating
expenses

Extraordinary
losses280

90

ProfitProfitattributable to attributable tonon-controlling owners ofinterests
parentSG&A
expensesProfitattributable toowners ofparent12

20,370Total income
taxes

2,717

4,612

FY12/2017

Highlights

Profit before
income taxes

FY12/2018

04

4,650

In the core Human Resources andEducation Business, there werenumerous measures from a medium- tolong-term perspective for making thebrand more powerful (ability to attract
people). Benefits of these activities
resulted in a record-high number ofpeople on assignments and sales inthis business, which made a big
contribution to the entire groupperformance. The results were higher
net sales and profits YoY.

Strategy for Human Resources and Education Business

Human Resources Platform
Value Chain344

Further improvements in the WH Group’s
appeal and ability to attract people

Human resources platform
Organization/mobility
About
Ability to meet needs

Creation of a broader
universe for new employees

Training in specialized fields that includes skill
enhancement, shifts to different career paths
and career advancement

Platforms/job assignment mobility forspecialists in fields with open innovation

3

Open innovation

Professionals

2

1

comprehensive( lineupof services )2

Recruiting various types of people by using ourown extensive and diverse recruiting channels

A diverse array ofways to join us

1

Branding

Ability to
attract
peopleElectricity

The basic idea behind the human resources platform concept
is to use specialists in many categories of manufacturing
rather than limiting these people to only a particular industry.
Career advancement support and a diverse range ofeducation programs are also part of this platform. To makethis organization even stronger, the platform includes
interaction among our business segments to share information

Automobiles

Outline of the human resources
platform and goals for this platform

Semiconductors

The New Medium-Term Management Plan 2021 includes theconcept of a human resources platform as the foundation forgrowth of the Human Resources and Education Business. The
reason is that we believe the survival of manufacturing inJapan will require companies to specialize in market sectors
where they are strongest, chiefly regarding technologies. In
the fields with open innovation, we anticipate morecooperation between companies and powerful external
partners.
Based on this outlook, we foresee a need to create aplatform that unifies the recruiting, training and organization
for specialists involving technologies and other skills neededby all manufacturers, providing these people will also
supplement the existing strengths of manufacturers. In

and exchange personnel.
The platform will first be used to target technologies andskills with the greatest potential. We will also upgrade activities
for utilizing the knowledge of our workforce in a broad
spectrum of applications. Most significantly, the creation of aplatform of people with specialized skills will make it easy topass on know-how to others. One example is maintenanceand repairs, which are tasks that all manufacturers perform.
Converting skills and experience of our workforce to explicit
knowledge will allow us to use our own technological skills asa unified group. This is a strength no competitor can match.
Establishing this platform for growth will give our group anenvironment where many types of people can fully utilize theircapabilities. This environment will reinforce our ability to attract
people by making us an even more attractive place to work.

Manufacturing

addition, we want to have a workforce that can be used for
assignments anywhere in Japan. We, thus, plan to expand to
new business domains and reinforce our competitive
superiority.

Technology

The future of manufacturing in Japan

Research

1

Building a “human resources platform” to create anenvironment where variety of people can fully use their skills

Technicians
Managers

R&D

Skill enhancement

Technology

New career path
Skill enhancement

System Integration
Factory
Sales & Marketing

New career path
Skill enhancement
Start

05

20

%

of workforce

Provides long-term jobs
that match employees’ About
goals and areresilient to business%climate changes due of workforce
to AI, the IoT andother new technologies

80Our Contract Research Organization Business2

Initiatives for creating
new “ways we live”

Our Logistics BusinessWe have been providing services to logistics companies since2012. As a large e-commerce retailer enlarged its
infrastructures to support growth, demand increased forthird-party logistics (3PL) within a distribution center. This
basically entails strategically outsourcing all or part of logistics
operations to external companies. Sales activities for 3PL are
how we first established a position in the logistics market.
Logistics was a new business field for us, so we started
from the ground up. As we provided services in this sector, wesoon realized that supplying the necessary number of people
is not the central requirement. Subcontracting for shipping
merchandise precisely as planned, rather than staffing
services, is what logistics companies need most of all.
Assigning people to posts where they are most effective
and productive is vital to achieving 100% reliability forshipments. To do this, we added time management, backoffice and other functions. Furthermore, the logistics businessdemanded frameworks for operations that complied with eachclient’s standards. This includes safety management, risk
management, business continuity planning and other aspects
of operations. Subcontracting technologies and expertise
acquired through our manufacturing services business was
extremely useful and allowed us to set ourselves apart fromthe companies that were already offering 3PL services.
In 2013, the receipt of a 3PL outsourcing contract at thelargest distribution base of the client was a dramatic turning
point in this business. A few thousand people were engaged
in logistics tasks at this location, including our on-site
employees, temporary staffing workers of our partnercompanies and the client’s own employees. To oversee thisworkforce, a labor management function, positioned between
recruiting and business operations, was established todetermine daily assignments for individual workers. We also
created systems and strengthened training programs in orderto improve efficiency. In addition, there were a few hundred of
our full-time employees to serve as a platform that supports
the distributing center workforce. These employees therefore
became one part of our human resources platform concept.
In the 3PL business, we worked as a partner with the client
to make its operations better and more efficient. Furthermore,this partnership enabled us to build strong medium- to longterm relationships with the client. Our success in the logistics
sector was due to our awareness that we could not use thesame business model as in the manufacturing sector.
Consequently, logistics illustrates how we are capable ofcreating new “ways we live” by redefining ourselves.

3PL at a Client’s
Largest Distribution Center
Our Subcontracted Tasks
Distribution center operations
Our on-site employees
Thousands
Partner company
ofon-site employees
peopleClient’s employees

Logistics activities within the center
Receipt/Inspections

Storage/Processing

Sorting

Stored merchandise
Picking
Processing returns
Destination sorting
Inventory management

The 2012 acquisition of DOT WORLD CO., LTD. (DOTW), addeda contract research organization (CRO) business to the WH
Group. DOTW supports operations management of clinical trials
that are part of the new drug development process. The missionof this company is to contribute to quickly commercialize new
drugs and medical devices by using timely ideas, speed and a
resolute commitment to completing projects.
Most Japanese CRO companies have grown over the years
mainly by performing monitoring. DOTW handles monitoring
as well as data management, the analysis of statistics, medical
writing and many other tasks. Clients can therefore rely on
DOTW as a one-stop provider of a full lineup of CRO services.
Furthermore, DOTW has experience conducting trials in Japanon behalf of overseas pharmaceutical companies as well as
trials on a global scale.
Clinical trials are increasingly conducted in many countries atonce. Currently, about 40% of the clinical trials in Japan are joint
operations with trials in Europe and North America. Also
noteworthy is the growing number of drug development projects
by European and U.S. middle-market and start-up companies
and the start of activities in Japan by these companies.
DOTW has the speed and agility that only a small company
can offer. The goal is to use these attributes to enter new
healthcare categories and strengthen the ability to captureorders for global projects. DOTW is dedicated to creating new“ways we live” by giving people stimulating and rewarding
jobs they can keep until retirement and by achieving sustained
growth through contributions to society.

Position and Role of CROs

Shipments
Packaging

Platform function (hundreds of our full-time employees)

C R O Drug development support for verifying safety and efficacy
Many tasks involving clinical trials outsourced by drug companies
Clinical trial participants(test subjects)

Recruiting/
Supervisionof working
hours
Establish andstrengthenback officeTimemanagement

Safetymanagement

Labor management(daily assignments),
oversight ofpartner staffing
service companies

Training
programs,
systemdevelopment andmanagement

Participation
Explanations andagreements

Development of
new drugs
Medicalinstitutions

Patients

06

Pharmaceuticalcompanies

Contract to conductclinical trial

Business Segment Overview

Human Resources and Education Business

Real Estate BusinessA new perception of value for work

Communities where people can live withconfidence at all time

With subcontracting and temporary staffing capabilities, we are a one-stop
provider of services extending from upstream to downstream processes in the
manufacturing sector.
Involvement with a diverse array of market sectors and products makes thisbusiness highly resilient to almost any type of change in the economic
environment and realizes services that support manufacturing in Japan.

Group Companies

Group Companies

This business serves many types of clients’ needs by operating real estatedevelopment, detached house, renovation, prefabricated house and many otherreal estate businesses.
Diversification across many geographic areas and business sectors greatly
reduces the vulnerability of this business to changes in the economic
environment. With this solid foundation, we can create residences andcommunities where people can live with confidence.

● WORLD INTEC CO., LTD.

● WORLD CONSTRUCTION CO., LTD.

● DOT WORLD CO., LTD.

● WORLD RESIDENTIAL CO., LTD.

● NICHIMO REAL ESTATE CO, LTD.

● OMACHI WORLD CO., LTD.

● WORLD INTEC FUKUSHIMA CO., LTD.

● GEOGRAPHIC INFORMATION OF KYUSHU, INC.

● WORLD STAFFING CO., LTD.

● WORLD ICITY CO., LTD.

● HOEIKENSETSU CO., LTD.

● PT.WORLD DEVELOPMENT INDONESIA● WORLD INTEC TAIWAN CO., LTD.

● NIKKEN TECHNO CO., LTD.

● WORLD WISTERIA HOMES CO., LTD.

● MIKUNI CO., LTD.

● COMPAX CO.,LTD.

● ENGMAINTEC CO., LTD.

● SAIHI INFORMATION SERVICE CO., LTD.

● WORLD MIKUNI CO., LTD.

● M’S WORLD CO., LTD.

Sales

75,038

YoY
millionsof yen13.6%

Segment
profit

UP!

4,964

Sales
Factory

R&D

UP!

52,011

Factory

66,041
8.7%
9.8%

9.0%

4.7%

20.3%

66.0%

6.0%

4.7%

55.0%

Segment
profitUP!

4,589

Renovation

11.3%

Sales composition

36.4%

26.9%

63.8%

4.8%

49,08025.0%

YoY
millionsof yen1.0%

DOWN

Segment profit

Real estate development

4,964

4,704
13.5%

YoY
millionsof yen

Sales
R&D

26.8%

18.4%

63.1%

Technology

Sales & Marketing

75,038

52.5%

5.5%

Sales

Segment profit
Technology

Sales & Marketing

Sales composition

YoY
millionsof yenDetached house

Prefabricated house

52,011

4,635

4,589

FY12/2017

FY12/2018

3.6%
30.7%

17.1%

14.9%

53.1%

50.9%

FY12/2017

FY12/2018(2.0)%

FY12/2017

FY12/2018

FY12/2017

FY12/2018

FY12/2018 Overview

FY12/2018 Overview

This business took actions based on the strategy of reinforcing its “ability to attract people” in order to become
even more appealing as the reorganization of Japan’s human resource services industry continues. Up-front
investments for training programs and other measures are a major part of these activities. Benefits of theseinvestments are slowly beginning to appear. As a result, sales and profits in this business continued to increase,making a big contribution to the entire group performance, even while making these investments for future
growth. Upgrading training programs enhanced the skills of our employees while improving the retention rate andincreasing the number of people on assignments. Training was also critical to our ability to add more locations forlogistics services. Restructuring our employee evaluation system is another priority. All these measures maximize
employees’ job satisfaction and improve their motivation, which boosts their productivity and value. Progress inthese areas made it possible to move even faster concerning the establishment of a human resources platform.

Persistently high prices are making the outlook for the real estate market increasingly unclear. To succeed in thischallenging environment, this business used its information resources and network of business relationships,
which are backed by operations spanning a broad range of market sectors and regions of Japan. By purchasing
and selling properties in a proper manner that reflected market conditions, this business posted record-highsales and made a contribution to growth of the entire group. Activities for improving the portfolio’s balance andstrength continued. We expanded operations to more areas of Japan and used business initiatives that leveraged
our sound positions in several real estate business domains. One significant accomplishment was an increase ofabout 30% in properties sold in the renovation business, a sector we focus on. The development business also
improved the balance of the real estate portfolio, particularly through the well-timed sales of properties.

07

Information and Telecommunications Business

OthersCreating new types of value involving
communications

To create new “ways we live”
Companies in this category taken on challenges by operating businesses that seek
to use activities outside the three core businesses for creating new “ways we live.”
For example, ADVAN CO., LTD. operates PC and online schools, produces websites
and creates a variety of designs. FARM CO., LTD. operates nine agricultural parksin Japan with a theme of harmony between nature, man and society.

The operation of mobile phone stores is the primary activity in this business.
Other activities include solutions for corporate clients and a telemarketingbusiness.
All of our mobile stores closely reflect the characteristics of their respective
locations. Our corporate solutions business and telemarketing business focus
mostly on assisting with cost-cutting at small and midsize companies.

Group Companies

Group Companies● E-SUPPORT, INC.

Sales

12,376● NETWORK SOLUTION CO., LTD.

YoY
millionsof yen35.0%

UP!

Segment
profit● BEST IT BUSINESS CO., LTD.

3

Sales

● ADVAN CO., LTD.

YoY
millionsof yen

85.1%

Sales

DOWN

3,467

● FARM CO., LTD.

YoY
millionsof yenSegment profit

21.4%

UP!

● CROWDEIGHT CO.,LTD.

Segment
profit

(270)

Sales

millions FY12/2017:of yen(272)million yen

Segment profit
3,467

12,376
Sales composition

8.7%

2,856*
Sales composition

25

9,167

2.4%

3
FY12/2017

FY12/2018

FY12/2017

FY12/2018

FY12/2017

FY12/2018

(272)

(270)

FY12/2018

FY12/2018* FARM CO., LTD. newly consolidated in Q2 FY12/ 2017

FY12/2018 Overview

FY12/2018 Overview

There were up-front investments to establish a network of highly competitive stores in order to benefit from ourposition as one of the few remaining companies in this business in association with the ongoing realignment of
the IT sector. The result was higher sales but a decline in profits. Sales increased because of the higher numberof phones sold, which was mainly the result of stores added in fiscal 2017. But profits were lower due to up-front
investments and a strategic increase in marketing expenses. Based on our strategy of establishing a dominantpresence for our stores, we will continue to build a network of highly competitive stores. Activities will include
closing and combining stores with a process that may use mergers and acquisitions, and training programs to
upgrade the client service, consultation and other skills of store personnel. The cost-cutting solutions business,
which serves small- and medium-size companies, continued to achieve growth in sales and earnings. We added
new products and conducted activities for starting new businesses in order to establish a foundation for growth infiscal 2019 and afterward.

At ADVAN CO., LTD., mainly operating PC schools, growth continued in the creative unit, which includes website
production and others. In addition, through collaboration with the Human Resources and Education Business,
ADVAN made a big contribution to improving the skills of people at all group companies. Expansion of systemengineer training in the Technology Staffing Business is the biggest beneficiary of this collaboration. Overall,
ADVAN produced substantial synergies with other group companies. FARM CO., LTD. and its affiliate operate
agricultural parks. In fiscal 2018, sales increased as the number of visitors to these parks was higher YoY. Park
attendance increased as the benefits of park improvements and many actions to attract more people outweighed
the negative impact of unfavorable weather and natural disasters during the peak season for these parks. To
increase attendance, FARM has made up-front investments that are expected to produce growth in the future.
One major project is the construction of a very large athletic facility called Alps Gym at Blumen Hugel Farm, anagricultural park in Shiga Prefecture. Alps Gym is scheduled to start operating in March 2019.

08

Topics

ESG“Social”

Jobs for Everyone
The WH Group has a workforce of about 20,000.
Working in a diverse range of industries, including human resources and education businesses, our Group creates many jobs across generations,genders, and types of occupations, and through unique efforts by the WH Group companies, we offer many people a new “potential to work.” As acorporate group whose social mission is to create the “Ways We Live,” we will pursue further challenges so that we can provide more opportunities
where people can thrive and shine.

Job Creation at the WH Group
Support for Women in Workplace
We are constantly seeking
more ways to allow women
to retain jobs while caring
for their children. One way
is by operating Job
Department Store, aprivate public employment
security office.

WORLD INTEC FUKUSHIMA CO., LTD.

Jobs for Victims of Disasters
Following the March 2011
earthquake and tsunami,
we started a number of
initiatives with the
Fukushima prefectural
government. In all, these
activities created jobs formore than 19,000 people
affected by this disaster.

Jobs for People with Disabilities
By creating better
workplace environments
where people withdisabilities can work withothers, we have created alarge number of jobs forindividuals living with avariety of challenges.

WORLD INTEC FUKUSHIMA CO., LTD.

Jobs for People of All Ages
The nine agricultural parks
that we operate have jobs
that are suitable for every
age group from teenagers
to seniors.

FARM CO., LTD.

09

GEOGRAPHIC INFORMATION OF KYUSHU, INC. *a special subsidiary

TOPIC 1

The WH Group’s Stance about Using More
Foreign Workers in Japan

TOPIC 2

The WH Group already uses foreign workers for the types of jobs listed in the table below. We
have performed studies to determine even more ways to use these workers. One requirement
is using foreigners in ways that match their visa status. We also consider if companies where
foreigners work are prepared to accommodate these workers. Also, foreign workers needsupport involving cultural differences, feeling at home in the locations where they live and otherissues. Naturally, compliance with laws and regulations is essential. Providing support for theworkers and the companies that hire them is therefore vital to the success of the foreign worker
system.
Japan newly introduced a system for foreign workers with specified skills in April 2019. Thisis expected to enable hiring foreigners with expertise and skills at a certain level that allow
them to become productive employees immediately. Big changes are anticipated in theindustries that hire foreigners and how these workers are used. By thoroughly examining thelegal framework and thoroughly studying other issues, we plan to establish a framework forcreating workplaces where foreigners can remain for many years.

WORLD STAFFING CO., LTD., a consolidated subsidiary of WORLD HOLDINGS CO., LTD.,
and JTB Communication Design, Inc., a subsidiary of JTB corporation, have jointly establishedJW SOLUTION CO., LTD. The new company will provide comprehensive human resource
services exclusively for the hotel industry.
There is a severe labor shortage in Japan’s hotel industry. Establishing JW SOLUTION
creates a platform for combining the expertise for the recruitment and personnel managementof WORLD STAFFING with the personnel training expertise of JTB Communication Design,
which uses this company’s distinctive hospitality system. The aim of the new company, which
is jointly established by WORLD STAFFING and JTB Communication Design, is to be a sourceof a new type of hotel human resource solutions for supplying highly trained workers able toprovide outstanding hospitality to hotel guests.
The Japanese government has established the goal of raising annual visits by foreign
tourists to 60 million people in 2030 as part of the Tourism Vision to Support the Future ofJapan. JW SOLUTION will focus on giving people skills required by hotels and creating aframework for supplying these people. The anticipated growth of foreign tourism in Japan will
create significant demand for more people at hotels. This includes Japanese employees aswell as people from other countries who have advanced or designated skills. Supplying people
able to provide hotel guests with outstanding hospitality will enable WORLD HOLDINGS toincrease the pace of activities associated with the Company’s mission of creating new “wayswe live.”

Visa Categories Allowing Working at the WH Group■ Categories already used by the WH Group■ New categories

Status of residence

Examples of applicable jobs

Job restrictions

Professional/
technical fields

Medical service/education professionals/
multinational company personnel/
attorneys/others

Only jobs designated by thestatus of residence

Foreign nationals
reside based on status

Long-term residents (Japanese descents)/
spouses of Japanese nationals/permanent
residents

No restriction

Technical interntraining

Interns for transfer of manufacturing/fishing/agriculture/other technologies

Maximum of 5 years; must leave
Japan at the end of the visa
periodDesignated activities

Economic partnership agreement nurse/
care worker candidate/working holiday
program/amateur athlete/others

Must earn national qualification
within 3 years in Japan; otherwise
mandatory return to home country

Permission for
extra-status activities

Part-time work by foreign students

Up to 28 hours of work per week,
up to 8 hours per day duringextended holidays

Specified skills 1

Individuals with considerable knowledge/
experience in one of 14 designated fields
and who have passed a test to confirm thisqualification

Maximum of 5 years

Specified skills 2

No visas granted for several years after thestart of this program

No restriction

Establishment of JW SOLUTION for
Comprehensive Human Resource Services
for the Hotel Industry

Shareholdings
Expertise for the recruitment andmanagement of high-quality personnel

80.2%

19.8%

Personnel training expertise based ona distinctive hospitality system

High-quality comprehensive human resource services
exclusively for the hotel industry

Profile of the New Company
JW SOLUTION CO., LTD.

Capital Stock¥50 million

Location

2-14-1 Higashi-Shinbashi, Minato-ku,
TokyoShareholders

WORLD STAFFING CO., LTD.
80.2%
JTB Communication Design, Inc. 19.8%

Representative

Shinji Honda, Representative Director

Established

April 1, 2019

Main BusinessComprehensive human resources
services for the hotel industry

Name

10

Corporate Data/Stock Information

Corporate Data
Name:WORLD HOLDINGS CO., LTD.

Established:

February 12, 1993

Capital stock:¥784 million

Number of authorized shares: 54,000,000
Number of shareholders: 2,773

18,852 (consolidated)Fukuoka Head Office:
6F Fukuoka Asahi Building, 2-1-1 Hakata Ekimae, Hakata-ku,
Fukuoka-shi, Fukuoka Prefecture 812-0011 Japan
Phone: +81-92-474-0555 Fax: +81-92-474-0777

Address:

Treasuryshares0.71%

Foreign entities, etc.
10.69%

Kitakyushu Head Office:2F, 11-2 Otemachi, Kokurakita-ku, Kitakyushu-shi, Fukuoka
Prefecture 803-0814 Japan
Phone: +81-93-581-0540 Fax: +81-93-581-0542

Otherentities
26.71%

Individuals/
others
34.89%

Shareholder
Composition

Financial
institutions
25.49%

Financial
instruments firms
1.51%

Businesses:

Executives:
Eikichi Iida, Chairman and President
Toru Iwasaki, Executive Director
Yuji Takai, Executive Director
Shinji Honda, Executive Director
Shigeru Nakano, Executive Director
Yoshihiko Mimasu, Executive Director
Toshihiko Kanno, Executive Director
Syuzou Ito, Executive Director
Akira Soejima, Executive Director

Number of Shareholding
shares held
ratio

Shareholders

IIDA Research Institute, Limited

4,500,000

26.53%

Eikichi Iida

3,361,500

19.82%

Japan Trustee Services Bank, Ltd. (Trust Account)

1,811,700

10.68%BNP PARIBAS SECURITIES SERVICES LUXENBOURG/JASDEC/FIM/LUXEMBOURG FUNDS/UCITS ASSETS
Standing Proxy: The Hongkong and Shanghai Banking
Corporation Limited, Tokyo Branch

770,000

4.54%

THE Kitakyushu Bank, Ltd. Standing ProxyThe Master Trust Bank of Japan, Ltd.

709,200

4.18%

Nanko Abe

500,000

2.94%

Sumitomo Mitsui Trust Bank, Limited (Trust Account Ko No. 8)424,600

2.50%

THE NISHI-NIPPON CITY BANK, LTD.

300,000

1.76%

The Master Trust Bank of Japan, Ltd. (Trust Account)242,900

1.43%

Japan Trustee Services Bank, Ltd. (Trust Account 9)204,400

1.20%* Shareholding ratio is calculated after deducting treasury shares (120,929 shares).

Tokyo Head Office:
4F NBF COMODIO Shiodome, 2-14-1 Higashi-Shinbashi, Minatoku, Tokyo 105-0021 Japan
Phone: +81-3-3433-6005 Fax: +81-3-3433-6003
Businesses related to the entire group including formulation ofmanagement policies for the holding company and the groupcompanies and management of the group’s business operations(Human Resources and Education Business, Real EstateBusiness, Information and Telecommunications Business)(As of December 31, 2018)

Major Shareholders:Number of shares outstanding: 16,956,600

Representative: Eikichi Iida, Chairman and President
Number of
employees:

Stock Information(as of December 31, 2018)

Dividends
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 increase the dividend consistently while using a consolidated payout
ratio of 30% as the guideline. We plan to pay a dividend of ¥83.0 per share with a record date of December
31, 2018 in accordance with this policy.

(as of March 20, 2019)

Koichi Hashida, Executive Director(Outside Independent)

Dividend per share (Yen)

75.3

83.0
65.5

Shingo Igarashi, Executive Director(Outside Independent)

45.7

Hideki Yamazaki, Executive Director(Outside Independent)

23.7

Kazuyuki Yamamura, Audit andSupervisory Board Member (Full-time)
Mitsuo Koga, Audit and Supervisory
Board Member (Outside)

82.7

4.5

4.5

FY12/2010

FY12/2011

Tetsuo Kato, Audit and Supervisory
Board Member (Outside)
11

8.5

10.0

FY12/2012

FY12/2013

FY12/2014

FY12/2015

FY12/2016

FY12/2017

FY12/2018

FY12/2019(forecast)