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Management Policy

(1) Basic Management Policy of the Group

We define our Mission; "We are focused on responding to the needs of society by creating new value, thereby contributing to a brighter and more fulfilling world in which all individuals can live life to the fullest" and "Creation of new value," "Contribution to society," and "Respect for all individuals" as The Recruit Way in our group management philosophy.

Under this management philosophy, we endeavor to become a company that supports positive actions of each individual by producing as many "No. 1 Matching Services" as possible that connects the industry and people, and conduct business operations to this end.

We will work on maximizing shareholder and corporate value through these business activities.

(2) Target Management Index

We will carry out various growth investments, including mergers and acquisitions, flexibly and aggressively to realize profit growth over the long-term. In line with this, we will also focus on increasing shareholder value, and have therefore set a management target―a high single-digit compound annual growth rate for "adjusted EPS" (*1) over the three years from year ended March 31, 2017 to year ending March 31, 2019.

In addition, in seeking to achieve our management target, we emphasize and will set a single-year growth rate of EBITDA (*2) for each fiscal year, taking into account an appropriate balance of investments and earnings growth.

*1 Adjusted EPS (adjusted profit per share): adjusted profit / (number of shares issued at the end of the period - number of treasury stock at the end of the period)
Adjusted profit: profit attributable to owners of the parent ± adjustment items (excluding non-controlling interests) ± tax reconciliation related to adjustment items
Adjustment items: amortization of intangible assets arising due to business combinations ± extraordinary income/losses

*2 EBITDA: Operating income + depreciation and amortization ± other operating income/expenses

As we will voluntarily adopt the International Financial Reporting Standards (IFRS) from the first quarter ending June 30, 2017, the above indices are based on IFRS.

(3) Business Environment Surrounding the Group, Issues to be Addressed and Management Strategy of the Group

We consider it a priority task to respond to the rapidly changing Internet business environment, capture the needs and the business opportunities in the global market ahead of others and maximize shareholder value and corporate value, under a swift decision-making structure. As part of these initiatives, starting from April 2016, we have worked to expand our business value based on the three Strategic Business Units (SBUs) of Global Online HR, Media & Solution and Global Staffing.

In order to further enhance these initiatives, effective from the first quarter ending June 30, 2017, the previous reportable segments of "Marketing Media," "HR Media," "Staffing" and "Other" will be changed to the "HR Technology," "Media & Solutions" and "Staffing" segments.

In terms of management strategies by business, the HR Technology segment will promote further expansion in the United States and other countries in the field of job advertisements, which is Indeed, Inc.'s existing business. The segment will expect a three-fold sales increase in the year ending March 31, 2019 (*1) from the year ended March 31, 2016 (*2) on a US dollar-basis, assuming the current economic conditions. We will also leverage assets, such as Indeed, Inc.'s advanced technology and user data accumulated through its existing businesses, and make effective use of mergers and acquisitions to create and expand new businesses in the HR-related business field.

In the Media & Solutions segment, not only is it important to pursue existing businesses, but we believe it is also critical to support the operation of small- to medium-sized company clients and provide various services and expand target client industries for the sustained growth of the business as a whole. By accelerating these initiatives, we will enhance the client base, build a multifaceted business portfolio, and aim for stable growth unaffected by the external environment.

In the Staffing segment, we will make efforts for the continuous improvement of the EBITDA margin, while adopting business management know-how from the overseas subsidiaries we have acquired. Through mergers and acquisitions overseas, we will develop the overseas staffing business into a business capable of generating sales of approximately ¥1 trillion by around 2020.

*1 Refers to the financial results of Indeed, Inc. for the year ending December 31, 2018, that is separate from our financial results.

*2 Refers to the financial results of Indeed, Inc. for the year ended December 31, 2015, that is separate from our financial results.