PERSOL HOLDINGS (TSE 2181)
FY2020 Q2

For Immediate Release
November 10, 2020

PERSOL HOLDINGS CO., LTD. (TSE 2181)
Consolidated Financial Results for the Six Months
Ended September 30, 2020
PERSOL HOLDINGS CO., LTD (the Company) today announced its consolidated financial results forthe six months ended September 30, 2020 and revised consolidated financial forecasts for Fiscal
Year 2020, ending March 31, 2021.
Consolidated Operating Highlights
1) Financial Results(In millions of yen, unless otherwise stated)
Six months ended September 30,
2019
2020
% change
478,956
465,755-2.8
20,116
13,875-31.0
28,94822,351-22.8
20,42915,339-24.9-5,1777,644-22.20
33.08
68.30
52.28
-23.5

Net sales
Operating profit
EBITDA1
Ordinary profit
Net profit2
Net profit per share (yen)Adjusted EPS3 (yen)Notes:

1. EBITDA=operating profit + depreciation + amortization of goodwill
2. Net profit attributable to owners of parent company
3. Adjusted EPS=adjusted profita/ (average number of shares during the period - number of treasury stock during the period)a.

Adjusted profit=net profit attributable to owners of parent company ± adjustment itemsb (excluding non-controlling interests) ±tax reconciliation related to certain adjustment itemsb.

Adjustment items=amortization of intangible assets except goodwill by acquisitions ± extraordinary income/losses

2) Balance Sheet Data
(In million yen, unless otherwise stated)
As of March 31, 2020

As of September 30, 2020

Total assets

370,993353,179

Net assets

163,906

166,890

Equity ratio

39.9%

42.5

147,850

149,968(Reference) Equity capital3) Dividend Status(In yen, unless otherwise stated)
Annual Dividend
End 1QEnd 2QFY ended Mar 2020

-

15.00

FY ending Mar 2021

-

13.00

FY ending Mar 2021 (Forecast)End 3QEnd of FY

TOTAL

-

15.00

30.00

-

13.00

26.00

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2

4) Consolidated Financial Forecast for the Fiscal Year Ending March 2021
(In millions of yen, unless otherwise stated)
FY2020 (full year)% change

Net sales

940,000-3.1

Operating profit

25,000-36.0

EBITDA

41,700-Ordinary profit

27,000-31.4

Net profit1

14,50090.5

Net profit per share (yen)

63.11

-

Adjusted EPS (yen)

98.58

-

Note:
1.

Net profit attributable to owners of parent company

Disclaimer
The statements concerning the Company's future business performances in this material such as
earnings forecasts are based on information currently available and certain assumptions deemed tobe reasonable by the Company, and do not mean that the Company promises to achieve thesefigures. Actual results may differ materially from the statements due to a variety of factors.

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2

Management Discussion and Analysis(1) Result of Operations
PERSOL GROUP (the Group) provides a wide range of human resources (HR) related services;
temporary staffing and placement service as the core in Japan and Asia-Pacific (APAC) region.
In the six months ended September 30, 2020, although COVID-19 pandemic was still expanding,regulations imposed have been loosen since around June 2020, which began to work as thebrakes on the worsening business climate. However, many companies remained prudent in theirbusiness activities out of concerns about future outlook and the HR market was also affected as
the ratio of active job openings to applicants in September 2020 in Japan was continuously
down to 1.03 (seasonally adjusted).
The Company’s placement business was still being affected by COVID-19 because companies inJapan were careful in recruitment decision although current state of orders received have been
showing a trend of slow recovery since July 2020. In APAC area in which the degree ofseriousness of the pandemic conditions vary in different regions, the business operations mainly
in placement business and temporary staffing business in manufacturing industry for the six
months ended September 30, 2020 (corresponding to a period from January to June 2020 for
overseas subsidiaries) were largely affected. Furthermore, Australian dollar became weakeragainst Japanese yen, the same as in the previous fiscal year.
In these severe business environment, total sales amount was JPY 465,755 million (decreasedby 2.8% year-on-year) as a result of reduced sales due to termination of “an” business andsignificant decreases in sales of Career SBU which operate placement business and APAC SBU
due to COVID-19, although Staffing SBU and Professional Outsourcing SBU achieved a sales
increase. In terms of profit, operating profit was JPY 13,875 million (decreased by 31.0% YoY)
because Career SBU that operates highly profitable placement business recorded a significant
decline in profit as a result of suffering a large impact of COVID-19, despite increased profits
recorded by Staffing SBU. Ordinary profit was JPY 15,339 million (decreased by 24.9% YoY)
and net profit attributable to owners of parent company was JPY 7,644 million (net loss of JPY
5,177 million for the same period of the previous year due to extraordinary loss including
goodwill impairment loss).
Results by SBU (before inter-segment elimination)*Note that the classification of segments for report was changed from the first quarter of FY2020
and the comparative analysis shown below was made in comparison of the restated figures inthe same period of the previous year of new segments after re-classification.

1. Staffing SBU
In this segment, the Group operates temporary staffing business, including mainstay clericaland administrative staff dispatching and wide range of staffing service, BPO (Business Process
Outsourcing) business and job referral service business mainly for administrative talents inJapan.
Sales for the six months ended September 30, 2020 were JPY 260,283 million (increased by
4.8% YoY) and operating profit was JPY 16,309 million (increased by 46.2% YoY).
Sales were increased in temporary staffing business as a result of an increase of operating daysby 1 from the same period of the previous year and increased unit billing rates in accordancewith “equal pay for equal work”. Also, BPO business contributed to sales increase because of an

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2

increased number of outsourcing projects. Operating profit increased as a result of the
improvement of profitability partly due to contribution made by highly profitable BPO businessin addition to the impact of the increase in sales.

2. Career SBU
In this segment, the Group operates placement business, supporting corporate client mid-career
hiring activities, and job recruitment media business.
Sales were JPY 29,715 million (decreased by 35.1% YoY) and operating profit was JPY 138
million (decreased by 98.5% YoY).
Sales were decreased mainly because placement business was affected by the trend ofcompanies’ restraint in recruitment activities due to an impact caused by COVID-19 and “an”
business was terminated (in November 2019). Operating profit was decreased as a result of
declined sales despite the efforts to reduce marketing cost and other costs.

3. Professional Outsourcing SBU
In this segment, the Group operates manufacture and development outsourcing business in IT
and engineering areas and temporary staffing business specialized in engineers dispatching.
Sales were JPY 53,696 million (increased by 7.1% YoY), and operating profit was JPY 989 million(decreased by 42.5% YoY).
Sales as a whole were increased because sales in IT area increased due to robust demand thatwas continuing in the same area, despite the fact that sales decreased continuously inengineering area as a result of the effect of manufacturers’ cutting their development budgets.
Operation profit was decreased because personnel cost increased as a result of increasing thenumber of staffs including new graduate employees at the beginning of this fiscal year as wellas an increased labor costs-to-sales ratio due to non-active engineers occurred in engineeringarea.

4. Solution SBU
In this segment, the Group provides digital solution services for hiring talents and humanresource management, and creates new businesses through incubation program.
Sales were JPY 2,190 million (decreased by 31.3% YoY), and operating loss was JPY 2,697
million (operating loss of JPY 474 million for the same period of the previous year).
Sales were decreased as a result of a trend of companies reluctant to hire new employees andthe effect of the request for self-restraint of business addressed to restaurants to prevent
COVID-19 from spreading. Operating loss was expanded due to sales decrease and increased
cost due to continued investment expansion from previous fiscal year.

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2

5. Asia Pacific SBU
In this segment, the Group operates temporary staffing business and placement business in
APAC area and human resource-related business and maintenance business in Australia (thosebusinesses are operated under PERSOLKELLY brand in Asia and under PROGRAMMED brand inAustralia).
Sales were JPY 124,664 million (decreased by 8.7% YoY), and operating loss was JPY 677
million (operating loss of JPY 283 million for the same period of the previous year).
Sales were decreased due to the impact of the spread of COVID-19 in the placement businessthroughout APAC and the effect of weak Australian dollar although temporary staffing businessexpanded in Singapore. In terms of profit, operating loss recorded because there were factorsthat in Asian region, profitable placement business resulted in decreased sales, and that inAustralia, the restructuring cost was booked and profitability of temporary staffing business wasdeteriorated due to the effect of COVID-19.

The business impacts caused by spreading COVID-19 infection
In Japan, while COVID-19 infection is still spreading, regulations has been loosen since around
June 2020 and social and economic activities are gradually resumed toward full recovery.
However, there are concerns continuing about the future outlook. Looking at the situation
overseas, social and economic activities are resumed and the economic conditions are gradually
moving toward full recovery in most regions as the same in Japan, although restriction of outing
and other regulations are continuously imposed by the governments to contain infection with
COVID-19 that is still spreading in some areas in APAC region where the Company operates
businesses.
Regarding the Group’s business in Japan, marketing area in temporary staffing business wasaffected by deteriorating business sentiment in retail industry and reduction of staff at stores,
and as a result operating ratio and operating hours decreased. In clerical and administrative
area which is the core of the business, the operation status remained the same in general as in
the same period of previous year despite a decrease in the number of new orders received yearon-year. In BPO business, demand for new contracts increased. In placement business, thenumber of orders received currently shows a sign of recovery after July 2020 as counselingmeetings and interviews have been performed online in most cases. However, it is only amoderate recovery because companies are tentative in recruitment. As for overseas business,business situations vary from country to country. Temporary staffing business was stable mainlyin Singapore where temporary workers were working from home, but business in somecountries was affected due to a decrease in the number of operating staffs, etc. In placementbusiness which suffered the effects of spreading COVID-19 such as a significant decline ofdemand for human resources, the number of orders received bottomed out in May 2020 and
now is on a trend of recovery except some regions where COVID-19 is spreading. On the other
hand, in Australia and New Zealand, staffing business operating blue-collar temporary staffing
service and maintenance business were both affected by COVID-19 such as a decrease in thenumber of projects.

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2(2) Financial Positiona.

Consolidated Balance Sheet
Total assets decreased by JPY 17,814 million compared with the end of the previous fiscal year.
Current assets decreased by JPY 13,875 million, and non-current assets decreased by JPY 3,939
million. The main reason for the decrease in current assets was that notes and accounts
receivable decreased by JPY 10,100 million and cash and deposits decreased by JPY 5,464
million. The main cause of the decrease in non-current assets was that while investment
securities increased by JPY 2,517 million, goodwill decreased by JPY 4,418 million and deferred
tax assets decreased by JPY 2,268 million.
Liabilities decreased by JPY 20,798 million compared to the end of the previous fiscal year.
Current liabilities decreased by JPY 10,282 million, and non-current liabilities decreased by JPY
10,516 million. The main reasons for the decrease in current liabilities were corporate bonds tobe redeemed within one year increased by JPY 10,000 million, however on the other hand, longterm borrowings due within one year decreased by JPY 10,000 million, accrued consumption
taxes decreased by JPY 4,586 million and accounts payable decreased by JPY 4,310 million.
Net assets were increased by JPY 2,984 million compared to the end of the previous fiscal year.
This was mainly caused by: payment of dividends of surplus of JPY 3,474 million, and posting
JPY 7,644 million in quarterly net profit attributable to owners of parent company, etc. which
resulted in increased retained earnings of JPY 4,170 million and on the other hand, a foreign
currency translation adjustments decreased by JPY 2,322 million etc.

As of March 31, 2020

As of September 30,
2020

Return on assets (ROA) for the period

2.3%

2.3%

Return on equity (ROE) for the period

5.0%

5.1%

Ratio of operating profit to sales

4.0%

3.0%

Ratio of ordinary profit to sales

4.1%

3.3%

Current ratio

159.6%

161.6%

Fixed assets ratio

99.7%

95.7%

Equity ratio

39.9%

42.5%

Total assets (JPY million)

370,993353,179

Equity capital (JPY million)

147,850

149,968

Cash and cash equivalents etc. at end of period(JPY million)

78,037

72,621PERSOL HOLDINGS (TSE 2181)
FY2020 Q2b.

Consolidated Cash flows
The balance of cash and cash equivalents (hereinafter "Capital") at the end of the six months
ended September 30, 2020 were JPY 72,621 million, increased by JPY 14,678 million from theend of the same period of previous fiscal year.
Following is an outline of each cash flow status and casual factors that arose in the six months
ended in September 30, 2020.
(Cash Flow from operating activities)
Capital acquired from operating activities was JPY 17,273 million (as compared with JPY 7,631
million acquired in the same period of the previous year). This was mainly due to: net quarterly
profit before taxes was JPY 14,693 million, a decrease in accounts receivable (trade) of JPY
8,286 million, payment of JPY 5,331 million in corporate taxes and a decrease in accrued
consumption taxes of JPY 4,493 million.
(Cash Flow from investing activities)
Capital utilized as a result of investing activities was JPY 6,985 million (as compared with JPY
9,886 million utilized in the same period of the previous year). This was mainly due to spendingof JPY 4,199 million on acquisition of intangible fixed assets and JPY 2,195 million spent on
acquisition of tangible fixed assets.
(Cash Flow from financing activities)
Capital utilized as a result of financing activities was JPY 14,912 million (as compared with JPY
8,896 million utilized in the same period of the previous year). This was mainly due to spendingof JPY 10,000 million to pay back long-term borrowings and JPY 3,471 million in dividend
payments.

(3) Explanation regarding future forecast information
Taking into account the current situation with market recovery, the Group-wide full-year
forecast in “Consolidated Financial Results for the Three Months Ended June 30, 2020”
disclosed on August 12, 2020 was revised.
For further details, please refer to “Differences between Financial Forecasts and Actual Results
for the Six-month Period of FY2020 Ended September 30, 2020 and Revisions of Financial
Forecasts for FY 2020” disclosed today.

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2

Consolidated Financial Statements(1) Consolidated Balance Sheet(in millions of yen)
As of March 31,
2020

As of September 30,
2020

AssetsCurrent assets
Cash and deposits

78,24772,783

Notes and accounts receivable-trade128,571

118,470

Work in process

7,618

8,338

Other

9,820

10,640Allowance for doubtful accounts

-707

-559

223,549

209,674

Buildings and structures, net

3,675

3,608

Tools, furniture and fixtures, net

2,013

2,016

Right of use assets, net

3,904

3,877

997

799

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

Land
Other, net

2,011

1,916

Total property, plant and equipment

12,603

12,217

Intangible assets
Trademark right

9,671

9,407

Goodwill

72,562

68,144Other

22,34823,180Total intangible assets

104,582

100,731

8,146

10,663

Investments and other assets
Investment securities
Deferred tax assets

9,063

6,795

Other

14,444

14,445

Allowance for doubtful accounts-1,397-1,34930,25730,554

Total non-current assets

Total investments and other assets

147,444

143,504

Total Assets

370,993353,179PERSOL HOLDINGS (TSE 2181)
FY2020 Q2(Consolidated Balance Sheet)(in millions of yen)
As of March 31,
2020

As of September
30, 2020

Liabilities
Current liabilities
Accounts payable – trade782

Short-term borrowings

5,300

3,818

－

10,000Current portion of bonds payable

458

Current portion of long-term borrowings

10,0000Accounts payable - other

69,26664,955

Income taxes payable

6,755

5,335

Accrued consumption taxes

17,764

13,177

Provision for bonuses

12,687

12,718Provision for bonuses for directors (and other officers)

56

19

Other provisions

772

758

Other

16,665

18,527

Total current liabilities

140,052

129,769

Bonds payable

20,00010,000Long-term borrowings

35,72835,728

Lease obligations

2,456

2,258

Deferred tax liabilities

4,860

4,443

Retirement benefit liability

989

956

Provision for share-based remuneration

383

463

449

523

Non-current liabilities

Provision for share-based remuneration for directors(and other officers)
Other provisions
Other
Total non-current liabilities

72

175

2,094

1,969

67,03556,518207,087

186,288

Share capital

17,47917,479

Capital surplus

20,396

19,165Retained earnings

126,285

130,456

Treasury shares-9,369-9,258

154,792

157,842

Total liabilities
Net assets
Shareholders’ equity

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income

471

1,862

-7,414-9,736-6,942-7,874Non-controlling interests

16,056

16,922

Total net assets

163,906

166,890

Total liabilities and net assets

370,993353,179PERSOL HOLDINGS (TSE 2181)
FY2020 Q2(2) Consolidated Income Statements and Comprehensive Income Statement(Consolidated Income Statement)(in millions of yen)
Year ended September 30,
2019

2020

Net sales

478,956

465,755

Cost of sales

371,052

367,093

Gross profit

107,904

98,662

Selling, general and administrative expenses

87,78784,786

Operating profit

20,116

13,875Non-operating income
Interest income

1125

Dividend income

124

128

Subsidy income

268

1,595

Share of profit of entities accounted for using equity method

215

71

Other

54

123

Total non-operating income

674

1,944

Interest expenses

268

198

Foreign exchange losses

77

119

Commission expenses

－

123

Other

15

39

Total non-operating expenses

361

480

20,42915,339Gain on sales of non-current assets

59

74

Gain on sales of investment securities

15

72

Gain on sale of businesses

33

－

Other

－

8

107

154

3

－

Impairment loss

12,75993

Provision of allowance for doubtful accounts

1,114

－

Restructuring loss

2,868

143

Non-operating expenses

Ordinary profit
Extraordinary income

Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets

Loss on valuation of shares of subsidiaries and associates

610－

Loss on valuation of investment securities－

32

Non-recurring loss－

531

17,356800

Profit before income taxes

Total extraordinary losses

3,180

14,693

Income taxes - current

7,807

4,989

Income taxes - deferred

-67

1,431

Total income taxes

7,739

6,420

Profit (loss)-4,559

8,272

Profit attributable to non-controlling interests

618

627

Profit (loss) attributable to owners of parent-5,177

7,644

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2(Consolidated Comprehensive Income Statement)(in millions of yen)Six months ended September 30,
2019
Profit (loss)

2020-4,559

8,272

Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities accounted for using
equity method
Total other comprehensive income
Comprehensive income

265

1,391

-2,184-2,517-48-14-1,967-1,140-6,527

7,131-7,009

6,713

481

418

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

PERSOL HOLDINGS (TSE 2181)
FY2020 Q2(3) Consolidated Cash Flow Statements(in millions of yen)Six months ended September 30,
2019

2020

Cash flows from operating activities
Profit before income taxes

3,180

14,693

Depreciation

4,523

5,174

Impairment loss

12,75993

Amortization of goodwill

4,308

3,348

Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors (andother officers)
Increase (decrease) in provision for share-based remuneration
Increase (decrease) in provision for share-based remuneration for
directors (and other officers)
Increase (decrease) in allowance for doubtful accounts

-1

-9

301

64

9

-35

61

190

68

74

1,158

-115

Increase (decrease) in other provisions

235

-57

Interest and dividend income

-136

-153

Interest expenses

268

198

-215

-71

Subsidy income-268-1,595

Loss (gain) on disposal of non-current assets

-55

-74

Loss (gain) on sales of investment securities

-15

-72

Loss on valuation of shares of subsidiaries and associates

610

－

－

32

Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on valuation of investment securities
Loss (gain) on sale of businesses-33－

Loss on business restructuring

2,868

143

Other extra-ordinary gain－

-8

Non-recurring loss－

531

Decrease (increase) in trade receivables

1,836

8,286

Increase (decrease) in trade payables-8,622-3,278

Increase (decrease) in accrued consumption taxes-3,526-4,49346-114

Decrease (increase) in other assets-1,542-1,603

Increase (decrease) in other liabilities-3,110-820

Subtotal

14,71020,323

Increase (decrease) in long-term accounts payable - other

Interest and dividends received

223

151

Interest paid

-277

-198

Proceeds from subsidy income

268

1,603

Income taxes paid

-10,117-5,331

Income taxes refund

2,823

725

Net cash provided by (used in) operating activities

7,631

17,273PERSOL HOLDINGS (TSE 2181)
FY2020 Q2(in millions of yen)Six months ended September 30,
2019

2020

Cash flows from investing activities
Payments into time deposits

-0

-21

Proceeds from withdrawal of time deposits

1244

Purchase of property, plant and equipment-2,678-2,195

Proceeds from sales of property, plant and equipment
Purchase of intangible assets

148

288

-3,864-4,199Proceeds from sales of shares of subsidiaries and associates

240－

Purchase of investment securities

-583

-546

47

88

-2,420－54－

Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sale of businesses

38－

Loan advances

－

-120

Collection of loans receivable2

1-1,035-355

Payments of guarantee deposits
Proceeds from refund of guarantee deposits

267

151

Other, net

-115

-121

-9,886-6,985-2,666-1,254-0-10,000

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares-2,507－

Dividends paid

-3,509-3,471Dividends paid to non-controlling interests

-198

-160

Other, net

-13

-25

-8,896-14,912Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

125

-791

Net increase (decrease) in cash and cash equivalents-11,027-5,416

Cash and cash equivalents at beginning of period

68,96978,037

Cash and cash equivalents at end of period

57,942

72,621