Investor Relations

Mid-term Plan

The Mid-term Plan that was announced in August 2015 and the mid-term growth strategy announced in August 2016 have been updated as follows (announced in August 2017).

Mid-term management plan policy

Mid-term basic policy

Expand business area and business scope centered on the "engineering field," improving productivity and providing stable returns to shareholders.

Giving concrete form to the growth strategy

Mid-term management indicators

"Sustaining an annual growth rate of at least 20%" and "achieving a consolidated operating margin of 10%" based on the two strategies of organic growth and M&A.

Evolving and giving concrete form to the growth strategy

In addition to speed of growth, we are oriented towards "growth accompanied by competitiveness."

The strategy aims to establish a "unique position," both regionally and in its business field, to further increase its competitiveness.

Overview of the worker dispatching undertakings market

Through organic growth and M&A, the Company achieved its target of ¥30 billion in net sales more quickly than anticipated. However, surveying the future possibilities for expansion in business scope at the same rate of growth, it is becoming difficult to maintain the speed of expansion through the domestic markets for engineering and manufacturing fields alone.
On the other hand, there is a global worker dispatching undertakings market worth roughly ¥40 trillion, consisting primarily of the developed countries of Europe and the US.

Overview of the worker dispatching undertakings market
Source:
*1 Yano Research Institute
*2 Market share of the global staffing industry 2015, Staffing Industry Analysts "World's Largest Staffing and Recruitment Firms"

The "unique position" sought by the Company in terms of region and business field

Regional

Establishing business platforms in multiple countries worldwide for engineering and manufacturing worker dispatch

It is becoming difficult to sustain our rate of growth in the markets in which we are currently expanding (domestic engineering and manufacturing fields).

  • Domestic engineering worker dispatch is profitable but remains a niche market, whereas manufacturing worker dispatch is a large market but with low margins.
  • Conversely, the global dispatch market is about 7 times the size of that of Japan, and is well established in the developed countries of Europe and the US.

Going forward, there is a growing risk that competition with the major players in the domestic market will intensify.

  • The revision of the Worker Dispatching Act last year lead to the disappearance of the barrier between the previous specified worker dispatch (non limited-term employment) and general worker dispatch (limited-term employment).
  • Worker dispatch companies are moving in the direction of increasing non limited-term employees due to labor shortages, and this also poses a threat to the engineering/manufacturing fields.

Enabling responses to global customer needs in multiple countries around the globe

  • The manufacturing companies that are our customers have already expanded their design, research & development and manufacturing sites in many countries overseas.
    If we can provide staffing services in multiple countries globally to such manufacturing customers, it is highly likely that our competitiveness will be enhanced.

The potential to leverage our business and management know-how

  • In the so-called general/office worker dispatching services industries, the major global and Japanese players have already expanded worldwide.
  • Our perception is that the business and management know-how for the dispatch business is common to, and effective in, all developed and mature markets around the world.

Field

Preparing to expand from our existing fields of mechanical and electrical into IT and software, as well as the booming areas of IoT and AI

Significant scope to expand human resource services in the increasingly important IoT and AI fields

  • The Company is working to expand in the IT and software fields by means of M&A, and we are further aware of the future importance for needs for human resources of areas such as IoT and AI.

The Company is in a position to provide the necessary human resources.

  • Because the fields of IoT and AI represent a fusing and an evolution of the fields of mechanical/electrical and IT/software, we believe that human resource services companies such as ourselves that are focused on these fields, have an excellent chance of being able to deal with the resulting future growth in needs for human resources.
  • If this is realized, our competitiveness will likely be enhanced.

Development with existing business at the core

While maintaining the domestic engineering/manufacturing business, we will expand in terms of both region and business field, aiming to maintain the Company's rate of growth.

Development with existing business at the core

Measures for mid-term initiatives

Measures to implement or consider

1. Organic growth and M&A in the domestic engineering/manufacturing dispatch market

2. Establish business platforms in multiple countries worldwide

3. In immature dispatch markets in Asia, make low-risk preparations for the future

4.[Mid-term initiatives]Consider the possibility of expanding into new fields (IoT, AI, etc.)

5. Use synergies with dispatch business in Japan to increase permanent placement business

As part of achieving "growth accompanied by competitiveness," use both organic growth and M&A as the two strategies to sustain an annual growth rate of sales at least 20%, and achieve a consolidated operating margin of 10%

Management indicators

Management indicators direction

"Sustaining an annual growth rate of sales at least 20%" and "achieving an annual growth rate of consolidated operating income of 20%" using the two strategies of organic growth and M&A

Management indicators direction
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