IR Presentation Material ：Briefing on Consolidated Financial Results

for the 1st Half Ended September 30, 2016
Temp Holdings Co. Ltd.
November 16, 2016

Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

Contents

Part.1 :Financial Highlights on Financial Results
for the 1st Half Ended September 30, 2016

Part.2 :Progress of
Mid-term Management Strategy

Part.3 :Progress ofplans for the Fiscal Year Ending March 31, 2017

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1

Part.1 :Financial Highlights on Financial Results
for the 1st Half Ended September 30, 2016

Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

2017/3 1st Half : Summary of Consolidated Business Results(Unit: billion yen)

Achieved the highest results,
due to steady growth of the existing businesses+12.5%+25.1%+25.3%

276.7
246.1
17.2

+21.7%

21.5
13.2

16.6
8.1

Sales

EBITDA

9.8

Profit attributable toowners of parent

OP income2016/3 1st half results

2017/3 1st half results

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3

2017/3 1st Half : Sales Analysis(Unit: billion yen)Contribution from the M&A,
in addition to increase in the revenues from the existing businesses -2.3+1.3+1.6+1.2+8.9+3.7+16.1

276.7

246.1

2016/3
1st halfresults

Organic growth＋24.0

Temporary
Staffing・BPO

ITOEngineering Recruiting

M&A+8.9

Otherbusinesses

M&A

Adjustment

2017/3
1st half
results

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4

2017/3 1st Half : EBITDA Analysis
Increase in EBITDA from the higher revenues
and the improvement of profitability, and M&A effects+2.7(Unit: billion yen)

-3.6
＋0.1

-0.0+5.1

21.5
17.2

2016/3
1st half
results

Organic growth＋4.2

Increase in income
due to the sales
growthIncrease in income
due to theimprovement ofgross profit ratio

M&A
＋0.1

Increase in SG&A
(ExceptAmortization)

M&A(ExceptAmortization)

Adjustment

2017/3
1st half
results

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5

2017/3 1st Half : OP income Analysis(Unit: billion yen)

Increase in OP income from the higher revenues,
despite of the increase in amortization+2.7-3.8＋0.1

-0.5

-0.2

+5.1

16.6
13.2

2016/3
1st half
results

Organic growth＋4.0

Increase inincome due tothe sales
growthIncrease inincome due totheimprovement ofgross profit
ratio

Increase in
SG&A

M&A
-0.3

M&A
(ExceptAmortization)

Increase ingoodwill
amortization

Adjustment

2017/3
1st half
results

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6

2017/3 1st Half : Consolidated Balance Sheets(Unit: billion yen)
As ofMarch 31,2016

Results
Asset

As of
September 30,2016

Results

Change236.2

256.3

20.0

130.6

148.9

18.3

105.6

107.3

1.7

102.7

108.5

5.8

Current liabilities

67.4

77.6

10.1

unpaid corporation tax etc.

Non-current liabilities

35.2

30.9

-4.3

＜Non-current liabilities andCurrent assets
Non-current assets

Liabilities＜Current assets＞
Increased in cash and deposit,
due to an increase in profit＜Current liabilities＞
Increase in account payable,

Owner’s capital＞

Net assets

133.5

147.7

14.2

Change due to conversion of thebond (D/E ratio：52.4%)

Owner’s capital

127.2

134.3

7.0
＜Minority interests＞

Minority interests

6.213.4

7.1

Increase due to M&ACopyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

72017/3 1st Half : Consolidated Statements of Cash Flows(Unit: billion yen)

2016/3
1st half results

2017/3
1st half results

ChangeCash flows from operating
activities

1.2

22.5

+21.3

Cash flows from investing
activities

-4.8

-3.9

+0.9

Cash flows from financing
activities

-3.9

-4.2

-0.3

Increase (decrease) incash and cash
Equivalents-7.4

14.0+21.5

Cash and cash equivalents
at end of period

52.7

65.2

+12.4

＜Increase (decrease) in
consumption tax payable ＞∟ 2016/3：-10.9∟ 2017/3： -0.6

＜Purchase of investments in
subsidiaries(resulting in changeof scope of consolidation)＞∟ 2016/3：-2.6∟ 2017/3：-0.3＜Increase (decrease) in longterm loans payable＞∟ 2016/3：-2.3∟ 2017/3：-2.3

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8

Dividend Policy
Stable dividend payment will be continued according to the progress of businessresults, while enhancing our business structure to be able to expand businessin growth areas swiftly and aggressively.

2016/3

Dividendper ShareDividend Ratio（Consolidated）

2017/3

InterimYear-end

InterimYear-end

6 yen*

7 yen

8 yen

8yen（Plan）

17.2％

18.7%（Plan）（※）Temp Holdings conducted the 3-for-1 stock split for the common stock of the company
in 29th Oct. 2015. Figures have been applied retrospectively to the Stock Split.
Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

9Part.2 :Progress of Mid-term Management Strategy

Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

In 2025, Japan will suffer from a shortage ofabout 5.83
million workers.
Supply-demand gap in 2025 (by industry, million workers)
ShortSurplus

IT Services

Wholesaleand retailAgriculture
and forestry

Transport

Building

Finance,
Real Estate

PublicUtilities

Manufacturing

Government

-4.82

-1.88

-0.57

-0.49

-0.39

-0.31

-0.02

+0.19

+2.45

Source : PERSOL RESEARCH AND CONSULTING CO., LTD.
http://hito-ri.inte.co.jp/roudou2025/

Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

114 solutions for the labor shortage

promoting the employmentof women

promoting the employmentof elderly people

Improve productivityof workers

promoting the employmentof foreign people

Source : PERSOL RESEARCH AND CONSULTING CO., LTD.
http://hito-ri.inte.co.jp/roudou2025/

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12

Corporate Philosophy, Group Vision＜Corporate Philosophy＞
Job creation, Individual growth, Contributing to Society＜Group Vision＞
Create social infrastructure for people and organizationthat catalyze growth and innovation

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13

Mid-term strategy

Strategy 1Brand-Building

Strategy 2

Aim to organic growth with IT system investment
and improving productivity

Strategy 3

Generate group synergy and group management

Strategy 4

Enhance our presence on Asia-Pacific region

Strategy 5

Enhance operational capability and service line with M&A

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14

Topic 1 : New brand of the Temp group
Change our corporate image to “Total HR solution provider“("TEMP“ group = temporary staffing)Through the growth of the “person”(PERSON)

To solve the social problem(SOLUTION)

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15

Topic２：A shift to company with audit and supervisory committee
In order to strengthen Corporate Governance,
Separation of the executive and supervisory
Up to 2016/6/17

NowChairperson

Yoshiko SHINOHARA--Vice Chairperson

Mikihiko HIBINO--President

Masamichi MIZUTAPresident

Masamichi MIZUTA

Vice President

Hirotoshi TAKAHASHI

Vice President

Hirotoshi TAKAHASHI

Director

Takao WADA

Senior Managing Director Takao WADA
Director

Toshihiro OZAWA

DirectorKiyoshi SEKI

Director(Outside)

Carl T. Camden

Director(Outside)

Carl T. Camden

Statutory Auditor

Hiroshi SHIMAZAKIDirector(*1)

Hiroshi SHIMAZAKIAuditor

Ryousuke TAMAKOSHIDirector(Outside *1)

Ryousuke TAMAKOSHI

AuditorNaoshige SHINDODirector(Outside *1)

Naoshige SHINDO

Auditor

Kaoru ARAIDirector(Outside *1)

Naohiro NISHIGUCHI

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16

Topic３：Change the management member
MIZUTA and TAKAHASHI devote to Group governance,
In order to strengthen Corporate Governance
Segment

OfficerTitle etc.

Temporary
Staffing・BPO

TakaoWada

Temp Holdings Co,.Ltd Senior Managing Director
Tempstaff Co.,Ltd CEOITOToshihiroNagai

Temp Holdings Co,.Ltd Executive Officer
Intelligence Business Solutions Co.,Ltd CEOEngineering

Mikio
Miyamura

Temp Holdings Co,.Ltd Executive Officer
Japan Tecseed Co., Ltd CEORecruiting

TaroMineo

Temp Holdings Co,.Ltd Executive Officer
Intelligence Co., Ltd CEO

Overseas

Takayuki
Yamazaki

Temp Holdings Co,.Ltd Executive Officer*TS Kelly ASIA Pacific=JV with Kelly Services Inc“TS Kelly ASIA Pacific*” Business Officer

Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

17

Topic４：Expand JV with Kelly Services in APAC
By expanding its scope from 4 countries/regions to 12,
They start to contribute 20.0 billion yen by sales from the 2nd half of the FY2017/3.
Point••

Expanding its scope from 4 countries/regions to 12
Temp Holdings continues to own 51 % of theexpanded joint venture, with Kelly Services owning
the remaining 49%.

Governance••

Building presence on major area of APAC
Strengthen Corporate governance(dispatch CEO and CFO from Temp HD)

Schedule••

2016：Proceed the integration
2017：Accelerate growth investment

Overview*For the detailed information, please refer to the Press Release of TS Kelly ASIA Pacific.
https://www.tempstaff.co.jp/english/corporate/pdf/20160408_01.pdf

RegionCopyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

18

Topic４：Expand JV with Kelly Services in APAC

Services

Have strengths inPlacement Business

Have strengths in
Temporary Staffing
Business

RegionSingapore, Malaysia
Indonesia, Vietnam

Main area in APAC
(except Vietnam)

ClientWe will continue to provide our global clients with seamless, cross border HR
solutions in Asia Pacific with the goal of becoming the most trusted talentmanagement brand in the region.

Japanese / Local / GrobalEnterprise, IT / Hightechnologies (Singapore)

Local / Grobal Enterprise,Finance (Singapore)*For the detailed information, please refer to the Press Release of TS Kelly ASIA Pacific.
https://www.tempstaff.co.jp/english/corporate/pdf/20160408_01.pdf

Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

19

Financial Target
Fiscal year 2020/3, Sales target is 750.0 Billion Yen
Aiming to grow continuously, on good condition

Sales

750.0 Billion Yen

EBITDA

60.0 Billion Yen

OP Income45.0 Billion Yen

Precondition

GDP Growthratio

Moderate Growth (around +0.0~1.0%)

Effective opening
to application ratio

Continuing strong demand based on economic growthand structural demand (around 1.0~1.2)
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20

Part.3 :Progress of plans for the Fiscal YearEnding March 31, 2017

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2017/3 Current situation
Structural labor shortage in Japan drives the situation :Order for our main business remains solid.
Temporary
Staffing
businessPlacementBusiness•••••

OverseasBusiness•

Growth of the number of our temporary workers andnew registrants remains strong.
Tempstaff won the satisfaction No.1 in the field of Reemployment ratio and other 2 categories in the 26th
temporary staff satisfaction survey in Japan.
Job opening-to-application ratio is 2.51 at October
2016 (aggregated by DODA, Intelligence).
Strong demand for candidates especially in IT Service
sector etc.
The growth rate in specific countries (such asSingapore) slowed with some deterioration of externalenvironment.
Continue to focus on strengthening Corporate
governance.
Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

222017/3 : Revision to the financial forecast (consolidated)
Demand from client companies remained solid. In particular, growth of Temporary
Staffing・BPO was quite significant. The financial forecast for the full fiscal year2017 was revised on November 11, 2016
(Unit: billion yen)
8/11
forecast(a)

11/11
Amendedforecast(b)change(=b-a)

2016/3
results(c)YoY(=b÷c)

Sales

584.0

590.0

+6.0

517.5

+14.0%EBITDA

41.8

42.7

+0.9

36.4

+17.4%OP income

31.7

32.5

+0.8

28.0

+15.9%

Ordinaryincome

31.9

32.8

+0.8

28.1

+16.4%

Profit attributableto owners ofparent

20.1

20.1

－17.3

+15.8%

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*For the detailed information, please refer to Appendix : Revision to the financial forecast (consolidated)

232017/3 Forecast : Consolidated PL(Unit: billion yen)

+14.0%

517.5

590.0
+17.4%
36.4

Sales
Progress
Ratio

46.9%

42.7

EBITDA
50.5%+15.9%+15.8%
28.0

32.5

17.3

20.1

Profit attributable toowners of parent

OP income
51.3%
2016/3 full year results

49.1%
2017/3 full year forecastsCopyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

24

2017/3 Forecast : Sales by Segment(Unit: billion yen)

+8.5%

+46.3%
401.8 436.0
105.0
71.7

+9.3%
24.7
Temporary
Staffing・BPO
Progress
Ratio

49.2%

27.0

ITO
47.6%

+8.0%
24.0

+58.5%

26.0

4.1

Engineering

Recruiting

48.3%

37.5%

2016/3 full year results

6.5

Others50.4%
2017/3 full year forecasts

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25

2017/3 Forecast : EBITDA by Segment(Unit: billion yen)

+16.5%+29.2%

20.2

23.5
13.3
+5.5%
2.72.6
Temporary
Staffing・BPO
Progress
Ratio

48.6%

ITO
36.7%

＋26.6%
2.0

10.3+79.6%
0.2
0.1

2.6

Engineering

Recruiting

48.6%

50.9%

2016/3 full year results

Others67.3%
2017/3 full year forecasts

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26

2017/3 Forecast : OP income by Segment(Unit: billion yen)

+17.4%+30.1%
17.4

20.5

8.6
＋30.5％ 6.6

+7.7%
2.0

1.8
Temporary
Staffing・BPO
Progress
Ratio

48.4%

ITO
34.4%

1.5+41.8%0.20.1

2.0

Engineering

Recruiting

50.3%

50.2%

2016/3 full year results

Others81.3%
2017/3 full year forecasts

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27

Appendix

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Job to applicants ratio
Job to applicants ratio (= number of positions ÷ number of applicants) is an indicator of thedemand for human resources. Basically correlated with the economy.
400

2.00

(10 thousands)

350

1.75

300

1.50

250

1.25

200

1.00

150

0.75

100

0.50

50Japanese assetbubble collapsed

Oil crisis
01970

1975

1980

1985

Number of positions (left axis)

Source : Ministry of Health, Labour and Welfare

1990

1995

Number of appricants (left axis)

0.25

Bankruptcy ofLehman Brothers
2000

2005

2010

0.00
2015

Job to appricant ratio (right axis)

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(Year)

29

“Labor shortage” by decreasing population
Working age population（aged 15~64）: 77,080 thousand of person,
decreasing since 1997. Labor shortage will be more serious.
Trends and future prediction of population composition(10 thousand person )14,000Future prediction
12,00010,000~15 years old

65 years old~

8,000

6,000

4,000

15~64 years old（Working aged population）

2,00001950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
(year)
Source : National Institute of Population and Social Security Research
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30

To solve the structural problem
We have to improve productivity of the existing labor force, and promote Quantitative increase
due to the labor market participation of non-labor force, to achieve economic growth.

Population aged 15 years old and over
Executive of company or corporation,
self-employed worker 1,030

Labor force
6,589
Population
aged 15 years
old and over
11,071indefinite-term employees
3,316

Improving productivity
ofthe existing labor force

fixed-term contract employees
2,038

Unemployed person 204
Attending School 677
Non Laborforce
4,482

House keeping 1,524

Improving the labor
participation rate

Others 2,281

Source : Statistics Bureau, Ministry of internal Affairs and Communicaitions（December 2015, 10 thousand of persons)
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31

Change in Society
Society is changing significantly in all aspects;
the labor market is becoming more and more important.

Globalization

Evolution oftechnology

Revisions/changes
in laws andregulations

Changes in thevalues for “work”

Widening Labor
mismatch

The extension of
the retirement age

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32

Topic４：Expand JV with Kelly Services in APAC
We will continue to provide our global clients with seamless, cross border HR
solutions in Asia Pacific with the goal of becoming the most trusted talentmanagement brand in the region.
Candidates

Talent Supply-chain
management

Clientcooperate

RPO,CWO,BPO
Consulting etc.

CEO,CFO,Management

Executive
SearchPlacement

GlobalCompany

SeniorMiddleTemporary
Staffing

HR Consulting

Local
Company

JuniorPayroll

Temp

Japanese
Company

BPO*For the detailed information, please refer to the Press Release of TS Kelly ASIA Pacific.
https://www.tempstaff.co.jp/english/corporate/pdf/20160408_01.pdf

Copyright © since 2016 Temp Holdings Co. Ltd. All Rights Reserved.

33

Appendix : Revision to the financial forecast (consolidated)
Demand from client companies remained solid. In particular, growth of Temporary
Staffing・BPO was quite significant. The financial forecast for the full fiscal year
(Units：million yen)2017 was revised on November 11, 2016
8/11
Forecast(a)

11/11
Amended forecast(b)

2016/3Results(c)Change(=b-a)

YoY
Growth Rate(=b÷c)Sales

584,000

590,000+6,000517,597+14.0%EBITDA

41,80042,730+930

36,408+17.4%OP income

31,70032,500+800

28,052+15.9%

Ordinary income

31,90032,800+900

28,190+16.4%

Profit attributableto owners ofparent

20,10020,100－17,356+15.8%*Internal transactions have not been eliminated from the figures.
*Rounded down (Units：million yen,%) *EBITDA = OP income + Depreciation + Amortization of Goodwill

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34

Appendix : Revision to the financial forecast (consolidated)(Units：million yen)

Sales

8/11
Forecast

11/11
amendedChangeComments

2016/3 Result

YoY
Growth Rate

Temporary
Staffing/BPO*

427,400

436,000+8,600

Revised up for Good external environment

401,854+8.5%

ITO*

26,65027,000+350

Revised up for Good external environment

24,701+9.3%

Engineering

25,26026,000+740

Revised up for Good external environment

24,070+8.0%

Recruiting

107,800

105,000-2,800

Revised down for mainly on overseas business

71,792+46.3%

Otherbusiness

6,440

6,500

+60

4,102

+58.5%

Adjustment-9,550-10,500-950-8,922－584,000

590,000+6,000517,597+14.0%

2016/3 Result

YoY
Growth Rate

17,459+17.4%

1,857

+7.7%

Total

OP Income

8/11
Forecast

11/11
amendedChangeComments

Temporary
Staffing/BPO*

18,55020,500+1,950

ITO*

2,020

2,000-20Engineering

1,600

2,000+400

Revised up for improvement of the profitability

1,532+30.5%

Recruiting

10,0008,600-1,400

Revised down for mainly on overseas business

6,612+30.0%

18200+182

141+41.3%

-488

-800

-312

448

－

31,70032,500+800

28,052+15.9%

Otherbusiness
Adjustment
Total*Internal transactions have not been eliminated from the figures.
*Rounded down (Units：million yen*ITO：IT Outsourcing

Revised up for improvement of the profitability

Strengthen investment on our new brand*BPO：Business Process Outsourcing

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35

Disclaimer•

The statements concerning the Company’s future businessperformances in this material such as earnings forecasts arebased on information available as of November 16, 2016
and certain assumptions deemed to be reasonable by theCompany, and do not mean that we promise to achievethese figures. Actual earnings may differ materially from thestatements due to a variety of factors.

•This briefing is only for better understanding. Please notethat numbers and indexes in this book are not audited.

August 2014 : Temp Holdings was added to the JPX Nikkei Index 400
What is the JPX
Nikkei 400？

It is a new stock price index that consists of companies that meet various requirements for globalinvestment, such as the efficient use of capital and a management perspective that is conscious ofinvestors, for the purpose of boosting the appeal of Japanese companies domestically andinternationally.

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36