Fullcast : Consolidated Financial Results Announcement for the Fiscal Year Ended December 31, 2021 (Consolidated)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

February 10, 2022

Consolidated Financial Results Announcement

for the Fiscal Year Ended December 31, 2021

[Japanese Standards] (Consolidated)

Company name:	Fullcast Holdings Co., Ltd.
Stock exchange listing:	First Section of the Tokyo Stock Exchange
Stock code:	4848
URL:	https://www.fullcastholdings.co.jp
Representative:	Kazuki Sakamaki, President, Representative Director and CEO
Contact:	Yasuomi Tomotake, General Manager of the IR and Finance Department
Telephone:	[phone]
Date of Annual General Meeting of Shareholders (Planned):	March 25, 2022
Date of submission of annual securities report (Planned):	March 28, 2022
Date of dividend payments (Planned):	March 11, 2022
Preparation of supplementary references regarding financial results:	Yes (Shown on our website)
Briefing for financial results:	Yes (For institutional investors and security analysts)

(Figures are rounded to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2021 (January 1 to December 31, 2021)

(1) Consolidated Business Results							(% = year-on-year change)
	Net sales		Operating profit	Ordinary profit		Profit attributable to
			owners of parent
	Million yen	%	Million yen	%	Million yen		%	Million yen	%
FY12/21	52,366	21.1	7,592	23.8	7,624		23.4	5,012	21.9
FY12/20	43,226	(2.8)	6,131	(15.1)	6,180		(12.5)	4,113	(11.4)

(Note) Comprehensive income:	FY12/21: 5,235 million yen (36.2 %)	FY12/20: 3,844 million yen ((27.8)%)
		Basic earnings per share	Diluted earnings per share	ROE	Ratio of ordinary profit		Ratio of operating
		to total assets		profit to sales
			Yen	Yen		%	%		%
	FY12/21		137.34	136.70		27.8	28.5		14.5
	FY12/20		111.69	111.04		25.7	26.1		14.2

(Reference) Share of profit and loss of entities accounted for using equity method: FY12/21: 26 million yen FY12/20: 163 million yen

(2) Consolidated Financial Conditions

	Total assets	Net assets	Equity-to-asset ratio	Net assets per share
	Million yen		Million yen	%	Yen
FY12/21 End	29,484		20,579	66.2	535.40
FY12/20 End	23,953		17,396	68.9	449.58
(Reference) Equity:	19,526 million yen as of December 31, 2021	16,504 million yen as of December 31, 2020

(3) Consolidated Cash Flows

		Net cash provided by (used in)		Cash and cash equivalents
	Operating activities		Investing activities	Financing activities	at end of period
	Million yen		Million yen	Million yen	Million yen
FY12/21	6,368		(99)	(2,168)	17,410
FY12/20	3,979		(89)	(2,472)	13,309

2. Dividend Status

		Dividend per share (yen)		Total amount of	Payout ratio	Dividend on
			dividends	net assets ratio
						(consolidated)
	Q1 End	1H End	Q3 End	FY End	Annual	(annual)	(consolidated)
	Yen	Yen	Yen	Yen	Yen	Million yen	％	％
FY12/20	-	19.00	-	22.00	41.00	1,505	36.7	9.5
FY12/21	-	21.00	-	23.00	44.00	1,604	32.0	8.9
FY12/22 Forecast	-	23.00	-	23.00	46.00		31.2

3. Consolidated Business Forecasts for the Fiscal Year Ending December 31, 2022 (January 1 to December 31, 2022)

(% = year-on-year change for each quarter and full-year)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	26,670		12.4	3,990	11.8	4,020	12.1	2,676	13.5	74.06
Full year	54,730		4.5	8,000	5.4	8,030	5.3	5,316	6.1	147.49

* Notes

(1) Important changes of subsidiaries during the period

	(Changes in specific subsidiaries involving changes in the scope of consolidation):	None
(2) Changes in accounting principles, accounting estimates, and re-presentation of changes
1)	Changes in accounting policies associated with revisions of accounting principles and others:	None
2)	Changes in accounting policies other than those mentioned in 1) above:	None
3)	Changes in accounting estimates:	None
4)	Re-presentation of changes:	None

(3) Number of issued shares (Ordinary shares)

1)	Number of issued shares at the term end (including treasury shares)	FY12/21	37,486,400	FY12/20	38,486,400
2)	Number of treasury shares at the term end	FY12/21	1,015,666	FY12/20	1,777,898
3) Average number of shares outstanding during the current term	FY12/21	36,491,354	FY12/20	36,821,528

Reference: Non-Consolidated Financial Results

1. Financial Results for the Fiscal Year Ended December 31, 2021 (January 1 to December 31, 2021)

(1) Business Results								(% = year-on-year change)
	Net sales		Operating profit		Ordinary profit		Profit
	Million yen		%	Million yen		%		Million yen	%		Million yen	%
FY12/21	6,481		(7.9)	4,265		(11.9)		4,311	(11.0)		3,804	(18.3)
FY12/20	7,035		2.8	4,839		6.5		4,845	6.6		4,659	28.0
	Basic earnings per share	Diluted earnings per share
			Yen			Yen
FY12/21			104.25			103.77
FY12/20			126.52			125.79
(2) Financial Conditions
	Total assets		Net assets			Equity-to-asset ratio	Net assets per share
	Million yen		Million yen		%		Yen
FY12/21 End			17,287			13,798		79.0		374.67
FY12/20 End			14,681			12,098		81.3		325.13
(Reference) Equity:	13,665 million yen as of December 31, 2021	11,935 million yen as of December 31, 2021

• Financial results are not subject to audit by a certified public accountant or auditing firm.
• Explanation of the proper use of financial and business forecasts and other important notes.

• Of all plans, business forecasts, strategies and other information provided within this document, those which are not historical facts are future outlooks based upon certain conditions and our management's judgments based upon currently available data. Therefore, we warn against relying solely upon these outlooks in assessing our business results, corporate value and other factors. Please also be informed that actual financial results may vary widely from our business forecasts due to various factors. Important factors that may have an impact upon our actual financial results include: (1) economic and financial conditions surrounding our Company and changes in the employment situation, (2) damages to infrastructure arising from disasters including earthquakes, and (3) changes in the relevant laws, including the Labor Standards Act and the Worker Dispatching Act, and in interpretations of these Acts. However, factors that affect our financial results are not limited to only these. Furthermore, please note that we may choose not to reexamine our business forecasts in response to new data, future events or other factors. For assumptions underlying our business forecasts and related issues, please refer to Page 4 "1. (3) Future Outlook."

		Fullcast Holdings Co., Ltd. (4848) Financial Statement and Results for the FY 2021
Table of Contents of Appendix
1. Operating Results and Financial Position...................................................................................................................	2
	(1)	Summary of Operating Results...................................................................................................................... ..	2
	(2)	Summary of Financial Position..................................................................................................................... ...	3
	(3)	Future Outlook......................................................................................................... ........................................	4
	(4)	Fundamental Policy for Allocation of Earnings and Dividends for the Current and Coming Fiscal Years.....	5
	(5)	Risks Associated with Our Businesses.............................................................................................................	5
2.	Corporate Group........................................................................................................................ ..................................	11
	(1)	Status of Affiliated Companies.........................................................................................................................	11
	(2)	Diagram of Business Activities.........................................................................................................................	13
3.	Management Policies..................................................................................................................... ..............................	14
	(1)	Fundamental Management Policies..................................................................................................................	14
	(2)	Target Management Indicators................................................................................................................... .......	14
	(3)	Medium to Long Term Management Strategies................................................................................................	14
	(4)	Management Environment and Key Management Issues.................................................................................	14
4. Fundamental Principles on Selection of Accounting Standards...................................................................................	16
5. Consolidated Financial Statements and Primary Notes................................................................................................	17
	(1)	Consolidated Balance Sheet..............................................................................................................................	17
	(2)	Consolidated Statement of Income and Consolidated Statement of Comprehensive Income..........................	19
	(3)	Consolidated Statements of Changes in Equity................................................................................................	22
	(4)	Consolidated Statement of Cash Flows.............................................................................................................	24
	(5)	Notes on Consolidated Financial Statements....................................................................................................	26
		(Notes on Going Concern Assumption)............................................................................................................	26
		(Additional Information)...................................................................................................................................	26
		(Notes on Significant Change of Shareholders' Equity)...................................................................................	26
		(Segment Information and Others)....................................................................................................................	26
		(Per-share information).....................................................................................................................................	30
		(Major Subsequent Events)...............................................................................................................................	31

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Fullcast Holdings Co., Ltd. (4848) Financial Statement and Results for the FY 2021

1. Operating Results and Financial Position

(1) Summary of Operating Results

During the current fiscal year, Japan's economy experienced a recovery amid the gradually easing situation of the

COVID-19 pandemic which led to a recovery in personal consumption, a recovery in corporate earnings with the exception of some areas of non-manufacturing and a recovery in business sentiment, despite remaining severity in some areas. Economic conditions are expected to continue to undergo a recovery given the effects of various government policies and improvements seen in overseas economies on the back of comprehensive measures to stop the spread of COVID-19 and the normalization economic activities. However, the economic horizon remains clouded and requires close monitoring of the rising downside risks caused by supply-side constraints and trends in raw materials prices, and the impacts on domestic and overseas economies caused by the pandemic including new variants and the impact of volatility in financial and capital markets.

The current operating environment surrounding the staffing service industry continues to show signs of recovery, including a sustained increase in effective job offers and signs of a recovery in the new job offers-to-applicants ratio, despite ongoing weakness in the employment situation amid the impacts of the COVID-19 pandemic. The future outlook indicates the operating environment will remain stable.

Against this backdrop, in current the fiscal year, the Fullcast Group implemented group management activities to achieve our goal of "Quickly restoring performance using customer-first approaches by addressing the external environment in a flexible manner." The Group also carried out marketing activities focused on boosting overall profitability of the Fullcast Group, particularly in the mainstay "Placement" (Note 1) and "BPO" (Note 2) services. In addition, our Company made preparations to further expand its business while fortifying our capabilities as a robust organization to maximizes profits by continuing to increase productivity and promote operational efficiencies across our entire Group.

Consolidated net sales increased by 21.1% year-on-year to 52,366 million yen driven by sales growth in the

"Short-Term Operational Support Business," due ongoing recovery in client demand and acquisition of public sector projects mainly supporting public vaccinations, despite the negative impacts associated with the COVID-19 and Japan's re-issuance of states of emergencies.

In terms of profits, consolidated operating profit increased by 23.8% year-on-year to 7,592 million yen, with consolidated ordinary profit rising by 23.4% year-on-year to 7,624 million yen, as the recovery trend in client demand continued, despite the impacts of COVID-19.

Profit attributable to owners of parent increased by 21.9% year-on-year to 5,012 million yen due to the increase in consolidated ordinary profit, although a gain on sale of investment securities was booked as an extraordinary income in the previous fiscal year.

Our Group considers the "sustained improvement of corporate value" to be one of its most important management issues. We manage our business by focusing upon capital efficiency and by Identifying ROE as a target indicator to reflect "improvement of corporate value" based on the goal of realizing ROE in excess of our capital cost, which represents the expected returns by shareholders and investors from our company. The Group targets ROE of 20% or higher.

ROE at the current fiscal year was 27.8%, and while this represents an increase of 2.1% points from 25.7% at the end of the previous fiscal year, our ROE continues to remain above our target of 20%.

Furthermore, the Group acquired shares of Progress, Inc. on April 1, 2021, making it a consolidated subsidiary. In addition, BOD Alpha Co., Ltd. and HR Management Co., Ltd. executed an absorption-type merger where BOD Alpha Co., Ltd. was the surviving company and HR Management Co., Ltd. was the extinct company, with the trade

name of the company was changed to HR Management Co., Ltd on July 1, 2021.

Notes: 1. The mainstay "Part-Time Worker Placement" service is referred to as "Placement".

2. The mainstay "Part-Time Work Payroll Management" services, as well as other personnel and labor-related business process outsourcing (BPO) services such as the "My Number Management" service, and the back office BPO services of BOD Group are referred to as "BPO".

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