Company Research and Analysis Report
FISCO Ltd.
http://www.fisco.co.jp

CAREERLINK CO., LTD. 伪伪FY2/16 non-consolidated sales grew 19.1% year on

6070 Tokyo Stock Exchange First
Sectionyear (y-o-y), ordinary income rose 14.9%, and net
income increased 21.3% to a record high26-May-16

Careerlink Co., Ltd.(6070) provides comprehensive human resource services, primarily businessprocess outsourcing. Its main strength is knowhow in operating projects that need to be launched
quickly and require large amounts of labor. Having completed many projects for the public sector,
the company is now receiving an increasing number of orders from private corporations for businessprocess outsourcing.

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru SatoOn April 14, 2016, the company announced its non-consolidated results for the fiscal year through theend of February 2016, i.e., for FY2/16. Sales advanced 19.1% y-o-y to ¥16,607mn, ordinary income
rose 14.9% to ¥944mn, and net income grew 21.3% to ¥591mn, a record high. Growth was led by
the business process outsourcing division, which thrived due to the completion of large projects forthe private sector. From November 2015, this division also benefited from the startup of projects forthe public sector related to the implementation of Japan’s new system of identification numbers for
all individuals. Ordinary income margin grew slightly less than sales because the company invested
notably in measures to promote future growth, primarily in bolstering its work force. However, sales
and income increased more y-o-y than the company had projected at the start of the fiscal year.
For FY2/17, the company projects a 20.3% y-o-y rise in non-consolidated sales to ¥19,984mn anda 17.2% upturn in ordinary income to ¥1,106mn, both record highs, eclipsing the previous highs of
FY2/13. The company anticipates sales growth for all four of its divisions, led again by the businessprocess outsourcing division. It expects this division’s sales to the public sector to more than double
y-o-y, mainly because of services to implement the new personal identification number system andto extend temporary government benefits. It also foresees division sales growth to the private sector,
reflecting services for companies to implement the new personal identification number system andnew orders, primarily from the financial sector. The company also forecasts double-digit sales growthfor its manufacturing and technology division and its office services division.
The company’s new medium-term business plan targets non-consolidated sales of ¥30,000mn
and ordinary income of ¥1,840mn for FY2/19. Careerlink expects its business process outsourcing
division to lead faster profit growth through FY2/19 than has been accomplished in previous years.
The company is also considering mergers and acquisitions as a means of growth, aiming to acquire
IT companies that would increase the competitiveness of its business process outsourcing division.
The impact of M&A has not been factored into the company’s medium-term projections, so it could
exceed its targets if it resorts to M&A.
Careerlink pays steady dividends and awards gifts to its shareholders. It has announced plans tomake a two-for-one share split on June 1, 2016 to increase the liquidity of its shares and attract moreshareholders. For FY2/17, it plans to pay a dividend of ¥10.0 per share, which is ¥1.0 more than it
paid for FY2/16. It also intends to present original QUO cards worth ¥500-2,000, depending on theholdings, to all shareholders as of the end of August 2016.

伪伪Check Point• Business for the public sector stemming from the implementation of a new system ofidentification numbers for all individuals is growing briskly• The company forecasts record-high sales and profits for FY2/17• The company’s equity ratio and interest-bearing debt ratio are improving

We encourage readers to review our complete legal statement on “Disclaimer” page.
1㻺㼛㼚㻙㼏㼛㼚㼟㼛㼘㼕㼐㼍㼠㼑㼐㻌㼟㼍㼘㼑㼟㻌㼍㼚㼐㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻔¥㼙㼚㻕㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻝㻘㻝㻝㻥㻞㻠㻘㻜㻜㻜

㻝㻘㻜㻟㻝㻥㻡㻤㻞㻜㻘㻜㻜㻜

CAREERLINK CO., LTD.

㻝㻘㻞㻜㻜
㻝㻘㻜㻜㻜

㻤㻟㻝

㻝㻢㻘㻜㻜㻜

6070 Tokyo Stock Exchange First
Section㻤㻜㻜㻢㻜㻜㻝㻞㻘㻜㻜㻜
㻤㻘㻜㻜㻜

26-May-16㻢㻜㻜㻝㻡㻘㻟㻣㻞

㻝㻣㻘㻤㻥㻤

㻝㻥㻘㻥㻤㻠
㻞㻥㻣㻝㻟㻘㻥㻠㻤

㻝㻢㻘㻢㻜㻣

㻠㻜㻜㻝㻝㻘㻡㻥㻤

㻠㻘㻜㻜㻜

㻞㻜㻜

㻜

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato㻔¥㼙㼚㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕㻜㻲㼅㻞㻛㻝㻞

㻲㼅㻞㻛㻝㻟

㻲㼅㻞㻛㻝㻠

㻲㼅㻞㻛㻝㻡

㻲㼅㻞㻛㻝㻢

㻲㼅㻞㻛㻝㻣㻱伪伪Business Outline
A human resource services company led by its businessprocess outsourcing division
Founded in 1996, Careerlink initially just dispatched temporary workers. Now, it has four divisions:business process outsourcing, customer relationship management, manufacturing and technology,
and office services.
In FY2/16, the business process outsourcing division accounted for 65.4% of the company’s total
non-consolidated sales, the customer relationship management division for 17.6%, the manufacturing
and technology division for 9.8%, and the office services division for 7.2%, as shown in the pie chart
below.

㻮㼞㼑㼍㼗㼐㼛㼣㼚㻌㼛㼒㻌㻲㼅㻞㻛㻝㻢㻌㼚㼛㼚㻙㼏㼛㼚㼟㼛㼘㼕㼐㼍㼠㼑㼐㻌㼟㼍㼘㼑㼟㻌㼎㼥㻌㼐㼕㼢㼕㼟㼕㼛㼚
㻣㻚㻞㻑
㻥㻚㻤㻑

㻮㼡㼟㼕㼚㼑㼟㼟㻌㼜㼞㼛㼏㼑㼟㼟㻌㼛㼡㼠㼟㼛㼡㼞㼏㼕㼚㼓㻯㼡㼟㼠㼛㼙㼑㼞㻌㼞㼑㼘㼍㼠㼕㼛㼚㼟㼔㼕㼜㻌㼙㼍㼚㼍㼓㼑㼙㼑㼚㼠㻹㼍㼚㼡㼒㼍㼏㼠㼡㼞㼕㼚㼓㻌㼍㼚㼐㻌㼠㼑㼏㼔㼚㼛㼘㼛㼓㼥㻝㻣㻚㻢㻑㻻㼒㼒㼕㼏㼑㻌㼟㼑㼞㼢㼕㼏㼑㼟㻢㻡㻚㻠㻑

We encourage readers to review our complete legal statement on “Disclaimer” page.
2

■■Business Outline

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

○Business Process Outsourcing
To increase operational efficiency, lower costs, and improve the quality of their services, businesses
and government organizations rely on outside companies to provide some of their businessprocesses. Careerlink’s business process outsourcing division contributes to this subcontracting
process in several ways. It dispatches temporary personnel to subcontractors for projects undercontract. It also presents proposals for improving operational efficiency to subcontractors anddispatches temporary personnel to the subcontractors under incentive contracts. It facilitates thesubcontracting of business processes by companies and government organizations, and it contracts
directly with these entities to provide temporary personnel.
By outsourcing some of their business processes, companies and government organizations can
reduce their fixed costs, since they do not have to use full-time employees for the outsourced
work, and lower their administrative costs. Subcontractors providing direct services to their client’s
customers and call centers can improve the quality of their services by outsourcing some of theirbusiness processes. The Public Services Reform Act implemented from 2006 requires publicagencies and other organizations affiliated with the government to use competitive bidding byprivate-sector companies for projects that meet a marketability test.
Careerlink’s main strength is its ability to supply even more than 1,000 workers to launch a large
project in about one month. Using its proprietary system for matching workers with jobs (a web-based
system that tests the abilities of workers and confirms their desired work schedules), the company
can quickly assemble a competitive work force. It can handle all administrative tasks required forits dispatched personnel at their work sites, and it can rapidly propose and implement policies toimprove operational efficiency by providing its regular, full-time employees (about 70% of its regular
employees are now assigned to client projects).
The company assembles teams of about 10 people, including a supervisor with extensive experience,and dispatches these teams to its customers. The supervisors instruct dispatched employees about
the business processes of the clients and standardize the work shifts of these employees, enabling
the rapid start-up of the projects and a smooth increase in productivity. This system is ideal for large
projects requiring many workers.
○Customer Relationship Management
Customer relationship management tries to develop good relationships between a provider of goods
or services and its customers, thereby improving customer satisfaction. Careerlink’s customer
relationship management division dispatches temporary workers or introduces full-time personnel totelemarketing subcontractors or to the contact centers of companies and other organizations. It also
undertakes telemarketing business as a subcontractor.
Like the business process outsourcing division, the customer relationship management divisiondispatches teams of personnel, but to telemarketing companies. Careerlink’s own contact center
subcontracts telemarketing business.
○Manufacturing and Technology
The manufacturing and technology division dispatches temporary workers to corporate plants andwarehouses to perform all kinds of manufacturing, assembly and distribution work. It also undertakes
this work as a subcontractor. Most of the division’s work is done in Hyogo Prefecture.
○Office Services
The office services division dispatches temporary workers, including those who may eventually
become regular employees of client companies, and introduces office workers as regular employees.
It also provides office services as a subcontractor.
The dispatching of temporary workers by the manufacturing and technology division and the officeservices division is under pressure from leading companies engaged in the same business, including
Temp Holdings Co., Ltd. (2168) and Pasona Group Inc. (2168). However, Careerlink retains thesebusinesses as a means to gain more customers for its business process outsourcing division.

We encourage readers to review our complete legal statement on “Disclaimer” page.
3

伪伪Business Trends
Business for the public sector stemming from theimplementation of a new system of identification numbers for
all individuals is growing briskly

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

(1) FY2/16 results
Non-consolidated sales advanced 19.1% y-o-y to ¥16,607mn, operating income climbed 15.2% to¥958mn, ordinary income rose 14.9% to ¥944mn, and net income grew 21.3% to ¥591mn. All thesefigures surpassed the company’s original forecasts and net income reached a record high.
Sales growth was led by the business process outsourcing division, which thrived due to thecompletion of large projects for the private sector and due to the receipt of more new orders from thepublic sector than the company had projected, mainly from November 2015 for the startup of projects
related to the implementation of Japan’s new system of identification numbers for all individuals. Thisdivision also drove quarter-on-quarter increases in sales and operating income throughout FY2/16.
The operating income margin declined by 0.2ppt y-o-y in FY2/16, mainly because the company
invested heavily in increasing and training its work force to handle large new orders for projects suchas those for the implementation of Japan’s new system of identification numbers for all individuals.
At the end of FY2/16, Careerlink had 716 regular employees, which was 227 more than it had
employed a year earlier. Of this total, 201 employees were experienced, mainly in business process
outsourcing, and somewhat more than 70% of these experienced employees were assigned toprojects. Thus, the company’s investment in its work force has underpinned its growth. SGA costs
grew by ¥289mn y-o-y in FY2/16. Of this increase, ¥164mn was a rise in personnel costs. The
remainder was increases in the costs of personnel training, recruiting and registering staff, and rent,
the latter stemming from the opening of a new training center.
Business results
FY2/15
Sales
Business process outsourcing
Customer relationship management
Manufacturing and technology
Office services
Cost of sales
SGA costs
Operating income
Ordinary income
Net income



(¥mn)

FY2/16

Results vs. sales Co. plan Results vs. sales

y-o-y13,948
8,410
3,040
1,546
950
11,000
2,115
831
822
487

19.1%
29.1%
-3.6%
5.6%
25.1%
20.4%
13.7%
15.2%
14.9%
21.3%

60.3%
21.8%
11.1%
6.8%
78.9%
15.2%
6.0%
5.9%
3.5%

16,368
9,664
3,853
1,842
1,009
951
938
562

16,607
10,853
2,931
1,632
1,189
13,243
2,404
958
944
591

65.4%
17.7%
9.8%
7.2%
79.7%
14.5%
5.8%
5.7%
3.6%

vs. co.
plan
1.5%
12.3%
-23.9%-11.4%
17.9%
0.7%
0.6%
5.1%

㻮㼞㼑㼍㼗㼐㼛㼣㼚㻌㼛㼒㻌㼝㼡㼍㼞㼠㼑㼞㼘㼥㻌㼟㼍㼘㼑㼟㻌㼎㼥㻌㼐㼕㼢㼕㼟㼕㼛㼚㻌㼍㼚㼐㻌㼝㼡㼍㼞㼠㼑㼞㼘㼥㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻻㼒㼒㼕㼏㼑㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻹㼍㼚㼡㼒㼍㼏㼠㼡㼞㼕㼚㼓㻌㼍㼚㼐㻌㼠㼑㼏㼔㼚㼛㼘㼛㼓㼥㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻯㼡㼟㼠㼛㼙㼑㼞㻌㼞㼑㼘㼍㼠㼕㼛㼚㼟㼔㼕㼜㻌㼙㼍㼚㼍㼓㼑㼙㼑㼚㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻮㼡㼟㼕㼚㼑㼟㼟㻌㼜㼞㼛㼏㼑㼟㼟㻌㼛㼡㼠㼟㼛㼡㼞㼏㼕㼚㼓㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕
㻞㻣㻝
㻞㻥㻟

㻔¥㼙㼚㻕
㻠㻘㻤㻜㻜
㻠㻘㻞㻜㻜
㻟㻘㻢㻜㻜

㻟㻘㻜㻜㻜
㻞㻘㻠㻜㻜
㻝㻘㻤㻜㻜

㻞㻟㻝
㻟㻢㻝

㻞㻡㻞
㻟㻝㻟
㻣㻠㻡 㻝㻝㻡

㻝㻘㻞㻜㻜
㻢㻜㻜

㻞㻞㻤
㻠㻠㻤
㻤㻞㻝

㻣㻢㻜

㻞㻥㻟
㻟㻢㻥

㻞㻣㻞
㻟㻥㻞

㻞㻟㻤
㻠㻞㻟
㻣㻝㻟

㻤㻟㻜

㻟㻞㻝

㻞㻢㻞

㻠㻟㻢

㻞㻜㻟
㻝㻤㻥

㻔¥㼙㼚㻕
㻟㻜㻟 㻟㻞㻜

㻢㻢㻣

㻟㻜㻞
㻠㻟㻟
㻢㻣㻢

㻞㻘㻟㻠㻞

㻞㻘㻞㻠㻡

㻞㻘㻟㻣㻣

㻞㻠㻜

㻞㻜㻜

㻣㻡㻢

㻝㻢㻜

㻝㻡㻝

㻞㻘㻞㻡㻡

㻞㻤㻜

㻞㻘㻢㻞㻜

㻞㻘㻤㻞㻝

㻟㻘㻜㻟㻠

㻝㻞㻜
㻤㻜

㻝㻘㻡㻢㻣

㻠㻜

㻜

㻜
㻝㻽

㻞㻽

㻟㻽

㻲㼅㻞㻛㻝㻡

㻠㻽㻝㻽㻲㼅㻞㻛㻝㻢

㻞㻽㻟㻽㻠㻽

We encourage readers to review our complete legal statement on “Disclaimer” page.
4

■■Business Trends(2) Division sales

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

○Business process outsourcing
In the business process outsourcing division, sales grew 29.1% y-o-y in FY2/16 to ¥10,853mn. The
division completed more large projects for the private sector in Greater Tokyo than it did in FY2/15.
Furthermore, it garnered more new orders than the company had planned, reflecting increases inorders from the private sector other than large orders in Greater Tokyo and increases in orders fromthe public sector to implement the new identification number system or extend temporary government
benefits. Sales to the private sector increased 31% y-o-y to account for about 88% of total division
sales, while sales to the public sector climbed 16% y-o-y to account for about 12% of division sales.
At the end of FY2/16, the division held 25 orders for projects to implement the new identification
number system or extend temporary government benefits for 24 local government entities. About
40% of the orders for projects to implement the new identification number system were the resultof proposals made by the company. This apparently shows an appreciation of the company’s
experience in planning, proposing and implementing business process outsourcing projects. Someof the local governments that have ordered projects to implement the new identification number
system or extend temporary government benefits have started to order projects for other purposes.
Rapid sales growth in the business process outsourcing division stems largely from two measures.
First, the division reorganized. It established a new, independent sales promotion department tostrengthen relationships with clients and set up a new personnel development department andopened a new training center to expand its work force and improve the training of its employees.
Second, the division strengthened its distinctive team dispatch model by registering more employees
based on career paths, increasing the number of employees that can be dispatched indefinitely, andincreasing the number of highly skilled employees. These changes enabled the division to win moreorders from the public sector and from financial institutions and systems integration companies in
the private sector.
○Customer relationship management
In the customer relationship management division, sales declined 3.6% y-o-y in FY2/16 to ¥2,931mn.
The division won new orders to support the contact centers of telecommunications companies,
primarily in Greater Tokyo, but staff dispatches to telemarketing companies decreased y-o-y. In
addition, Careerlink strategically prioritized the acquisition of new orders by its business process
outsourcing division, its most profitable division. This emphasis contributed to the downturn in sales
in the customer relationship management division.
○Manufacturing and technology
In the manufacturing and technology division, sales rose 5.6% y-o-y in FY2/16 to ¥1,632mn. Orders
from makers of machinery parts fell y-o-y, mainly in the second half of the year, but orders fromexisting customers in the food processing and pharmaceutical industries increased, supporting sales
growth.
○Office services
In the office services division, sales advanced 25.1% y-o-y in FY2/16 to ¥1,189mn reflecting an
increase in the amount of work ordered by business centers that were already clients and an increasein new orders from financial companies, mainly securities companies and trust banks.

伪伪Business Outlook
The company forecasts record-high sales and profits for
FY2/17(1) Company forecasts for FY2/17
For FY2/17, the company projects a 20.3% y-o-y rise in non-consolidated sales to ¥19,984mn, a
16.8% increase in operating income to ¥1,119mn, a 17.2% upturn in ordinary income to ¥1,106mn,
and a 22.1% advance in net income to ¥722mn. All these forecasts would be record highs. The
company anticipates sales growth for all four of its divisions, led again by the business process
outsourcing division.

We encourage readers to review our complete legal statement on “Disclaimer” page.
5

■■Business Outlook

Company forecasts for FY2/17

Sales
Operating income
Ordinary income
Net income

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Results
16,607958
944
591

FY2/16
vs. sales

5.8%
5.7%
3.7%

y-o-y
19.1%
15.2%
14.9%
21.3%

Co. plan
19,984
1,119
1,106
722

FY2/17E
vs. sales

5.6%
5.5%
3.6%

(¥mn)
y-o-y
20.3%
16.8%
17.2%
22.1%

The company projects a 0.2ppt y-o-y drop in its operating income margin in FY2/17, due mainly to its
forecast of a 0.4ppt fall in its gross profit margin. The company foresees shrinkage in sales from its
existing large projects for business process outsourcing and a corresponding decline in gross profit
from these projects. Furthermore, it believes that many of its new business process outsourcing
projects will be in the start-up phase in FY2/17, and productivity tends to decline temporarily in thisphase. The company forecasts a ¥400mn y-o-y increase in its SGA costs in FY2/17. Of this, ¥300mn
is an increase in personnel costs. The company plans to increase its work force by only 75 people
in FY2/17, of which, 57 are to be new college graduates. Although this is smaller than the increase
in its work force in FY2/16, the costs of the new employees taken on through FY2/16 will be borne
throughout FY2/17, contributing to the rise in personnel costs.
One objective of management strategy for FY2/17 is to win the top share of the Japanese market for
on-site business process outsourcing services for both the public sector and the private sector. To
reach this goal in the public sector, the company plans to increase the number of local governmentorganizations with which it does business and to gain more orders for main public-sector businesses
that are likely to be recurring. To realize these plans, the company intends to raise the quality
and efficiency of its services and to further differentiate itself from competitors by disseminatingknowledge to its employees. To reach this goal in the private sector, the company plans to devise
large projects to meet the diverse outsourcing needs of the financial sector and to efficiently use its
personnel to increase the proportion of outsourcing services it provides relative to the total number
subcontracted by its clients. For example, it may reassign highly appraised on-site personnel to othernew projects. For the manufacturing and technology division, the company will establish strategic
teams to gain new clients and hasten sales growth. For the division’s existing clients engaged in
distribution, the company will try to dispatch store personnel, thereby increasing the proportion of
total work done for these clients.
FY2/17 management strategy (public sector)

Source: Company materials

We encourage readers to review our complete legal statement on “Disclaimer” page.
6

■■Business Outlook

FY2/17 management strategy (private sector)

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Source: company materials

Company forecasts of FY2/17 sales by division○Business process outsourcing
The company foresees a 20% y-o-y rise in sales in the business process outsourcing division to¥13.0bn. It expects about half of the roughly ¥2.2bn sales increase to come from services for the
public sector to implement the new system of personal identification numbers or to extend one-time
financial benefits. Services for the implementation of the system of personal identification numbers
were begun in November 2015, so there is ample potential growth of these services. In FY2/17,
business acquired in the final four months of FY2/16 will contribute to sales for the entire fiscal
year, and the division will acquire new business. In FY2/16, the government extended extraordinary
financial benefits once. In FY2/17, it plans to make such payments twice, in May and August 2016.
This implies a doubling of services required for these payments. The division has also begun toreceive orders for services for the main businesses of local government entities for which it has
already provided services to implement the system of personal identification numbers. Thus,
Careerlink expects sales by the business process outsourcing division to the public sector to morethan double y-o-y in FY2/17.
However, the company projects only about a 7% y-o-y rise in sales by the business process
outsourcing division to the private sector in FY2/17. It foresees a slight decline in sales from large
projects but expects this decline to be more than offset by increases in sales for the implementationof the personal identification number system, sales to financial institutions, and sales stemming fromthe liberalization of the market for electric power. The division has also begun to increase its contracts
directly with companies outsourcing their business processes, rather than with the subcontractors ofthese companies, and such direct contracts are more profitable than contracts with subcontractors.
○Customer relationship management
The company forecasts a 5.8% y-o-y increase in sales by the customer relationship management
division in FY2/17 to ¥3.1bn, the first rise in four years. It sees this growth arising from an increase
in work for the call centers of financial service companies, such as securities companies and trustbanks.
○Manufacturing and technology
Careerlink projects a 41% y-o-y jump in sales by the manufacturing and technology division in
FY2/17 to ¥2.3bn. Until now, this division has relied mainly on the company’s branch office in Himeji
for sales, but this fiscal year, the company will improve the sales capability of its branch office inOsaka to promote business in western Japan, primarily the Greater Osaka area and Shikoku.
Current division clients, such as food processing companies, appreciate the quality of the services
provided by the division and are inquiring about expanding the use of these services. Therefore,
Careerlink anticipates new contracts with plants of current customers that are not currently served by
the division. The company also foresees a recovery in orders from manufacturers of machine parts
in FY2/17 after the downturn in these orders in the second half of FY2/16.

We encourage readers to review our complete legal statement on “Disclaimer” page.
7

■■Business Outlook○Office services
The company forecasts a 27% y-o-y rise in sales by the office services division in FY2/17 to ¥1.5bn,
reflecting an increase in demand for temporary clerical workers, mainly at financial companies, andthe division’s efforts to increase sales from the introduction of regular workers to corporate clients.
(2) Medium-term plan

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

The company has announced a new business plan for FY2/17–FY2/19. This plan targets sales of¥30.0bn and operating income of ¥1.85bn for FY2/19. It envisions profit growth of more than 20% per
year, led by the business process outsourcing division. According to the plan, the operating income
margin should bottom out at 5.6% in FY2/17, when the company expects the business process
outsourcing division to supply 65.1% of total sales, then climb to 6.2% in FY2/19, when the company
forecasts a 70.0% sales weighting for the business process outsourcing division.
The company plans to improve its position as a supplier of business process outsourcing solutions.
For example, it aims to provide services for upstream IT processes and for top-tier vendors of these
services. By maintaining high service quality and efficiency, the company aims to improve its worthwith customers and its brand. It also intends to gain more projects of a recurring nature. As a result of
these measures, the company projects that sales in the business process outsourcing division reach¥21.0bn in FY2/19, which would be 93% higher than division sales in FY2/16.
The customer relationship management division will expand operations in businesses peripheral toits main businesses, targeting highly profitable projects, and connect more with projects undertakenby the business process outsourcing division. It plans to improve the quality of its staff and therefore
raise the average value of orders received each year. The medium-term plan foresees sales of¥3.9bn in the customer relationship management division in FY2/19, which would be 34% higher
than division sales in FY2/16.
The manufacturing and technology division intends to expand the scale of its business with existingclient manufacturers and, by recruiting high-quality personnel for dispatching, win orders for new,highly profitable projects. It also plans to expand business in fields peripheral to its main fields and toconnect its business with that of the business process outsourcing division. According to the mediumterm plan, sales in the manufacturing and technology division should reach ¥3.8bn in FY2/19, which
would be 133% more than its sales in FY2/16.
The office services division plans to move toward a business model combining the dispatch ofclerical workers for fixed periods of time, the dispatch of irregular workers for indefinite periods,
and the dispatch of temporary workers who may be offered regular employment in the future. While
promoting the business of dispatching temporary workers who may be offered regular employment in
the future, gaining new clients, and improving its recruitment of high-quality job seekers, the division
will seek more work in businesses peripheral to its main businesses and link its businesses moreclosely to those of the business process outsourcing division. According to the medium-term plan,
this division should amass sales of ¥1.3bn in FY2/19, which would be only 12% higher than its
sales in FY2/16. This is the lowest rate of growth projected for any of the four divisions, reflecting
two factors: 1) this division operates in areas where competition from leading personnel dispatch
companies is intense, and 2) Careerlink stresses overall profitability over the growth of any single
business.
The company may also undertake mergers and acquisitions over the next three years, although theimpact of such transactions is not reflected in the targets for business performance. Therefore, if thecompany were to merge or acquire another company, its performance may exceed its targets. The
acquisition of technology companies engaged in upstream IT processes would probably increase
the competitiveness of the business process outsourcing division. After the implementation, in
September 2015, of Japan’s amended Temporary Staffing Services Act, Japan’s personnel dispatch
industry is projected to consolidate as small, specialized providers leave the industry. Thus, theopportunities to acquire one or more of these small companies are likely to grow.

We encourage readers to review our complete legal statement on “Disclaimer” page.
8

■■Business Outlook

Medium-term plan

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

FISCO Ltd. Analyst
Yuzuru Sato

FY2/17E

FY2/18E

FY2/19E

16,607
10,853
2,931
1,632
1,189
958
5.8%
944
591

20,00013,000
3,100
2,300
1,500
1,119
5.6%
1,106
722

25,00017,000
3,600
3,100
1,300
1,510
6.0%
1,500
970

30,00021,000
3,900
3,800
1,300
1,850
6.2%
1,840
1,200

Sales
Business process outsourcing
Customer relationship management
Manufacturing and technology
Office services
Operating income(Operating income margin)
Ordinary income
Net income



24.9%
26.6%

㻮㼞㼑㼍㼗㼐㼛㼣㼚㻌㼛㼒㻌㻌㼟㼍㼘㼑㼟㻌㼎㼥㻌㼐㼕㼢㼕㼟㼕㼛㼚㻌㼍㼚㼐㻌㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻻㼒㼒㼕㼏㼑㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻹㼍㼚㼡㼒㼍㼏㼠㼡㼞㼕㼚㼓㻌㼍㼚㼐㻌㼠㼑㼏㼔㼚㼛㼘㼛㼓㼥㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻯㼡㼟㼠㼛㼙㼑㼞㻌㼞㼑㼘㼍㼠㼕㼛㼚㼟㼔㼕㼜㻌㼙㼍㼚㼍㼓㼑㼙㼑㼚㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻮㼡㼟㼕㼚㼑㼟㼟㻌㼜㼞㼛㼏㼑㼟㼟㻌㼛㼡㼠㼟㼛㼡㼞㼏㼕㼚㼓㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕
㻝㻘㻡㻝㻜

(¥mn)

Important disclosuresand disclaimers appear
at the end of this document.

FY2/16(¥mn)
Compound annual
growth rate
(FY2/16–FY2/19)
21.8%
24.6%
10.0%
32.5%
3.0%
24.5%

㻠㻜㻘㻜㻜㻜
㻟㻞㻘㻜㻜㻜
㻞㻠㻘㻜㻜㻜

㻝㻘㻜㻟㻝㻝㻢㻘㻜㻜㻜

㻝㻘㻡㻟㻟
㻝㻘㻝㻣㻤
㻠㻘㻞㻞㻥

㻝㻘㻝㻝㻥
㻥㻡㻤
㻤㻟㻝
㻥㻟㻝
㻝㻘㻜㻥㻥
㻟㻘㻟㻤㻜

㻤㻘㻜㻜㻜
㻝㻜㻘㻥㻡㻣

㻥㻡㻜
㻝㻘㻡㻠㻢
㻟㻘㻜㻠㻜
㻞㻥㻣

㻢㻘㻝㻤㻣

㻤㻘㻠㻝㻜

㻲㼅㻞㻛㻝㻠

㻲㼅㻞㻛㻝㻡

㻝㻘㻝㻤㻥
㻝㻘㻢㻟㻞
㻞㻘㻥㻟㻝

㻝㻘㻡㻜㻜
㻞㻘㻟㻜㻜
㻟㻘㻝㻜㻜

㻝㻜㻘㻤㻡㻟

㻝㻟㻘㻜㻜㻜

㻲㼅㻞㻛㻝㻢

㻲㼅㻞㻛㻝㻣㻱

(¥mn)
㻝㻘㻤㻡㻜

㻞㻘㻜㻜㻜
㻝㻘㻢㻜㻜

㻝㻘㻟㻜㻜
㻟㻘㻤㻜㻜
㻝㻘㻟㻜㻜
㻟㻘㻝㻜㻜
㻟㻘㻢㻜㻜

㻟㻘㻥㻜㻜

㻝㻘㻞㻜㻜
㻤㻜㻜

㻝㻣㻘㻜㻜㻜

㻞㻝㻘㻜㻜㻜㻠㻜㻜㻜㻜㻲㼅㻞㻛㻝㻟

㻲㼅㻞㻛㻝㻤㻱

㻲㼅㻞㻛㻝㻥㻱

伪伪Financial condition and shareholder return policy
Equity ratio and interest-bearing debt ratio are improving(1) Financial condition
At the end of FY2/16, total assets amounted to ¥5,620mn, which was ¥305mn more than the figure ayear earlier. Trade accounts receivable increased by ¥516mn, investment securities by ¥199mn, andlease and guarantee deposits by ¥79mn in FY2/16, while cash and deposits decreased by ¥555mn.
Total liabilities at the end of FY2/16 came to ¥2,961mn, which was ¥158mn less than the amount ayear earlier. Interest-bearing debt grew by ¥107mn in FY2/16, but income taxes payable declinedby ¥179mn and accrued consumption taxed shrank by ¥151mn. Net assets amounted to ¥2,658mn
at the end of FY2/16, which was ¥463mn more than they totaled at the end of FY2/15. With theaddition of FY2/16 net income, retained earnings grew by ¥591mn in FY2/16. However, the company
paid ¥100mn in dividends during FY2/16 and ¥26mn for more treasury shares to establish a stock
payment trust for its new employee stock ownership plan.
The company’s equity ratio and interest-bearing debt ratio, indicators of financial safety, havebeen improving each year, and its overall financial condition has been strengthened as its profits
have grown. The operating income margin fell to 5.8% in FY2/16 from 6.0% in FY2/15, but this still
exceeded the average operating income margin for Japan’s human resources industry of about 5%.
The company’s ROE was 24.4% in FY2/16, which is higher than the industry average.

We encourage readers to review our complete legal statement on “Disclaimer” page.
9

■■Financial condition and shareholder return policy

Balance Sheet

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Current assets(Cash and deposits)
Fixed assets
Total assets
Current liabilities
Fixed liabilities(interest-bearing debt)
Total liabilities
Net assets(Measures of financial safety)
Equity ratio
Interest-bearing debt ratio(Measures of profitability)
ROA (Ordinary income ÷ total assets)
ROE (Net income ÷ Total equity)
Operating income margin(¥mn)
At of 2/16 Change y-o-y
4,900
-2
2,617
-555
719
307
5,620
305
2,476
-158
484
0
875
107
2,961
-158
2,658
463

At of 2/13
3,867
2,549
321
4,188
2,037
486
878
2,523
1,665

At of 2/14
3,027
1,579
362
3,389
1,108
495
785
1,603
1,786

At of 2/15
4,902
3,173
412
5,314
2,635
484
768
3,119
2,194

39.8%
52.7%

52.7%
44.0%

41.3%
35.0%

47.3%
32.9%

24.4%
45.9%
5.8%

7.5%
9.4%
2.6%

18.9%
24.5%
6.0%

17.3%
24.4%
5.8%

(2) Shareholder return policy
Careerlink pays steady dividends and awards gifts to its shareholders. It has announced plans tomake a two-for-one share split on June 1, 2016 to increase the liquidity of its shares and attract moreshareholders. For FY2/17, it plans to pay a dividend of ¥10.0 per share, which is ¥1.0 more than it
paid for FY2/16. It also intends to present original QUO cards worth ¥500-2,000, depending on theholdings, to all shareholders as of the end of August 2016.

㻰㼕㼢㼕㼐㼑㼚㼐㼟㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㼍㼚㼐㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛(¥)

㻰㼕㼢㼕㼐㼑㼚㼐㼟㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕

㻝㻞㻚㻜

（㻑）
㻢㻜㻚㻜

㻡㻜㻚㻥

㻝㻜㻚㻜

㻝㻜㻚㻜

㻡㻜㻚㻜

㻥㻚㻜
㻤㻚㻜

㻤㻚㻜

㻣㻚㻜

㻠㻜㻚㻜

㻣㻚㻜

㻢㻚㻜

㻟㻜㻚㻜

㻞㻜㻚㻠

㻝㻥㻚㻝

㻝㻣㻚㻟

㻠㻚㻜

㻞㻜㻚㻜

㻝㻞㻚㻡
㻞㻚㻜

㻝㻜㻚㻜

㻜㻚㻜

㻜㻚㻜
㻲㼅㻞㻛㻝㻟

㻲㼅㻞㻛㻝㻠

㻲㼅㻞㻛㻝㻡

㻲㼅㻞㻛㻝㻢

㻲㼅㻞㻛㻝㻣㻱

㻺㼛㼠㼑㻦㻌㻰㼕㼢㼕㼐㼑㼚㼐㼟㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㼒㼛㼞㻌㼍㼘㼘㻌㼥㼑㼍㼞㼟㻌㼔㼍㼢㼑㻌㼎㼑㼑㼚㻌㼍㼐㼖㼡㼟㼠㼑㼐㻌㼒㼛㼞㻌㼠㼔㼑㻌㼕㼙㼜㼍㼏㼠㻌㼛㼒㻌㼠㼔㼑㻌㻞㻙㼒㼛㼞㻙㻝㻌㼟㼔㼍㼞㼑㻌㼟㼜㼘㼕㼠㻌㼜㼘㼍㼚㼚㼑㼐㻌㼒㼛㼞㻌㻶㼡㼚㼑㻌㻝㻘㻌㻞㻜㻝㻢

Shareholder gifts
Qualifying
shareholders
Gift
Frequency andtimingAll shareholders registered at the end of August
Holders of 100-199 shares QUO card worth ¥500
Holders of 200-499 shares QUO card worth ¥1,000
Holders of 500 shares or more QUO card worth ¥2,000
Once a year, scheduled for the latter part of OctoberWe encourage readers to review our complete legal statement on “Disclaimer” page.
10

■■Financial condition and shareholder return policy

Income Statement

CAREERLINK CO., LTD.
6070 Tokyo Stock Exchange First
Section26-May-16

Important disclosuresand disclaimers appear
at the end of this document.

FY2/13
17,89816.4
14,685
82.1
2,181
12.2
1031
71.9
5.8
981
72.7
5.5
563
98.9
3.2

Sales
(y-o-y)Cost of sales(vs. sales)
SGA costs(vs. sales)
Operating income(y-o-y)(vs. sales)
Ordinary income(y-o-y)(vs. sales)
Net income(y-o-y)(vs. sales)

FY2/14
11,598
-35.2
9,498
81.9
1,803
15.5
297
-71.2
2.6
282
-71.2
2.4
161
-71.3
1.4

FY2/15
13,94820.3
11,000
78.9
2,115
15.2
831
179.9
6.0
822
190.6
5.9
487
201.2
3.5

FY2/16
16,60719.1
13,243
79.7
2,404
14.5
958
15.2
5.8
944
14.9
5.7
591
21.3
3.6

(¥mn,%)
FY2/17E
19,984
20.3

1119
16.8
5.6
1106
17.2
5.5
722
22.1
3.6

Important financial data
Earnings per share (¥)
56.2
13.8
39.2
47.2
57.6
Dividends per share (¥)
7.0
7.0
8.0
9.0
10.0
Net assets per share (¥)
148.5
144.6
174.8
212.3
Note: Per-share data for all years have been adjusted for the impact of the 2-for-1 share split planned for June
1, 2016FISCO Ltd. Analyst
Yuzuru Sato

We encourage readers to review our complete legal statement on “Disclaimer” page.
11

Disclaimer
FISCO Ltd. (the terms “FISCO”, “we”, mean FISCO Ltd.) has legal agreements with theTokyo Stock Exchange, the Osaka Exchange,and Nikkei Inc. as to the usage of stock
price and index information. The trademark and value of the “JASDAQ INDEX” are theintellectual properties of the Tokyo Stock Exchange, and therefore all rights to them belong
to the Tokyo Stock Exchange.
This report is based on information that we believe to be reliable, but we do not confirm or
guarantee its accuracy, timeliness,or completeness, or the value of the securities issued bycompanies cited in this report. Regardless of purpose,investors should decide how to use
this report and take full responsibility for such use. We shall not be liable for any result of its
use. We provide this report solely for the purpose of information, not to induce investment
or any other action.
This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content
of this report are subject to change without prior notice.
All intellectual property rights to this report, including copyrights to its text and data, areheld exclusively by FISCO. Any alteration or processing of the report or duplicationsof the report, without the express written consent of FISCO, is strictly prohibited. Anytransmission, reproduction, distribution or transfer of the report or its duplications is also
strictly prohibited.
The final selection of investments and determination of appropriate prices for investment
transactions are decisions for the recipients of this report.
FISCO Ltd.