FULLCAST : Integrated Report 2022

FULLCAST HOLDINGS

Integrated Report

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Providing the bestplacefor people to bring out theirbest.

Japan faces the urgent task of creating a "new labor force" that underpins the growth and competitiveness of its companies. Yet those who can be the main participants in this new labor force are students, homemakers, and other adults who already have "commitments" that make it difficult to make long-termcommitments to employment.

At the same time, more and more people are looking for employment opportunities that are "more fulfilling and enjoyable."

By supplying people with short-termwork opportunities tailored to their lifestyle needs, the Fullcast Group is able to "unlock a new labor force" and support every person to "success in workplaces where they can shine." We believe this is our mission.

Editorial Policy

The Fullcast Group has published its 1st integrated report in order to deepen stakeholders' understanding of its management and overall corporate activities aimed at the sustainable creation of the Group's corporate value. This integrated report focuses on conveying the overall picture of the Group to stakeholders. This includes featuring information essential to investors, introducing the Group's vision, initiatives in each business segment and current situation, as well as the Group's platform for value creation underpinning these efforts. Going forward, we will continually work to increase the quality of our integrated report while reflecting the views of our stakeholders.

"International Integrated Reporting Framework," International Integrated

Reporting Council (IIRC)

Period: Fiscal year ended December 31, 2021 (January 1, 2021 to December 31, 2021)

Scope: The Fullcast Group and its subsidiaries and affiliates

Figures: As of December 31, 2021

Forward-Looking Statements> The opinions and forecasts contained in this report are based on the Company's judgment at the time of preparation and involve risks and uncertainties. The Company does not guarantee or promise the accuracy or completeness of such information. Please also be informed that actual financial results may vary widely from our business forecasts due to various important factors.

CONTENTS

Corporate Philosophy ……………………………………………………………………………………… 02

Message from the CEO …………………………………………………………………………………… 04

Dialogue……………………………………………………………………………………………………… 06

Value Creation Process …………………………………………………………………………………… 08

Corporate History …………………………………………………………………………………………… 10

Business Model …………………………………………………………………………………………… 12

Sustainability………………………………………………………………………………………………… 14

ESG Information …………………………………………………………………………………………… 16

Corporate Governance …………………………………………………………………………………… 18

Medium-Term Management Plan ………………………………………………………………………… 22

Short-Term Operational Support Business ……………………………………………………………… 26

Sales Support Business/Security, Other Businesses…………………………………………………… 28

Introduction to Officers……………………………………………………………………………………… 30

Financial Analysis …………………………………………………………………………………………… 32

Financial Data ……………………………………………………………………………………………… 34

Performance Highlights …………………………………………………………………………………… 38

Non-Financial Data ………………………………………………………………………………………… 40

Company Information ……………………………………………………………………………………… 42

Inquiries

IR and Finance Department, Fullcast Holdings Co., Ltd.

FORECAST Gotanda WEST, 8-5-9 Nishigotanda, Shinagawa-ku, Tokyo

TEL: [phone]

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President, Representative Director and CEO

Kazuki Sakamaki

Message from the CEO

Expanding our founding short-term operational support services to seniors and foreign nationals and building on trust and credibility to become a driving force for further growth

Achieved record high profit of 7.6 billion yen through acquisition of new projects amid COVID-19 pandemic

Amid the COVID-19 pandemic, FY2021 was a difficult year overall, including for our client companies. Therefore, we assessed the conditions and approached industries with a shortage and demand for human resources. By meeting the long-term need for human resources, particularly in the logistics and manufacturing industries, we have been able to steadily expand Dispatching services in our main segment, the "Short-Term Operational Support Business." In addition, acquisition of new public sector projects, mainly in vaccination support, enabled us to achieve a record-high consolidated operating profit of 7.6 billion yen.

people to bring out their best," we are committed to providing support for finding a place to shine in the work we supply, or for taking the next step and finding a place to shine on a new stage.

Fullcast Holdings is the only listed short-term operational support services company and was selected as a component of the "JPX-Nikkei Mid and Small Cap Index" for the sixth consecutive year in FY2021, as well as being selected as a component of the "JPX-Nikkei Index 400" for the first time in FY2021. Even during the COVID-19 pandemic, we were able to achieve ROE of at least 20% and a total return ratio of 50%, which are our KPIs.

Providing solutions for the declining labor force as sustainability management

myself, who is an executive officer, the remaining six are consisting of 3 Directors who are independent Outside Directors with professional expertise and are Audit & Supervisory Committee Members, and 3 Directors with management experience. In addition to the Remuneration Committee established in FY2020, a Nomination Committee was established during FY2021, with 4 members consisting of myself and 3 independent Outside Directors. In the future, we hope to further deepen discussion of the nomination process and succession planning.

Future issues for the "Short-Term Operational Support Business" and formulation of a new Medium-Term Management Plan for FY2024

In 2013, immediately after we switched from a business model centered on short-term temporary staffing to one centered on part-time job placement and part-time job payroll processing due to the amendment of the Worker Dispatching Act, our operating profit was about 300 million yen and we faced a very difficult situation. Under these circumstances, the Company was able to successfully shift its business model and win the trust of both client companies and individuals seeking jobs, resulting in six consecutive years of sales and profit growth from FY2014 to FY2019. We achieved the target in our Medium-Term Management Plan for the five years through to FY2020, announced in 2016, which was "to achieve a record-high operating profit of 5.0 billion yen in the final year of the plan," in FY2018, the third fiscal year of the plan. We also achieved a record high profit in FY2019. In FY2020, we recorded a decline in sales and profit compared with FY2019, due in part to the COVID-19 pandemic, but we were able to achieve a record high profit against in FY2021, the previous fiscal year.

The driving force of this growth is our founding business of human resource services, with a focus on short-term human resources. In accordance with the main purpose of the revised Worker Dispatching Act that went into effect in October 2012, we have developed and expanded our business model of "Placement + Part-Time Worker Payroll Management" in compliance with the law. With corporate philosophy of "Providing the best place for

From the perspective of sustainability management, we believe we can solve the issue of a declining labor force due to Japan's low birthrate and longevity through the services we provide. We will bring into the labor force people who have not been able to participate in the labor market in the past, such as housewives, seniors, and people wanting side jobs who prefer short-term and part-time job, and propose them to our client companies. At present, the majority of registrations are still female, but we have already created a subsidiary specializing in hiring seniors and a subsidiary and a joint venture for hiring foreign nationals to prepare for growing needs due to the escalation of the decline in the labor force. Faced with labor shortages, we believe that our importance will increase in the future as we will promote the corporate activities by developing the capabilities of such workers. We place the highest priority on compliance in our management, and in addition to implementing thorough safety checks using recruitment listings and on-site inspections, we provide our employees with extensive training on labor-related laws and regulations and codes of ethics. We believe that winning the trust and confidence of both client companies and workers through such efforts will lead to the development and expansion of our business.

In addition, the Company has adopted the institutional framework of a company with an Audit & Supervisory Committee in order to ensure the transparency of governance. Out of the seven Directors, other than

In 2022, we transitioned to the Prime Market under the new market classification on April 4, and we will make every effort to continue being selected as a component of the "JPX-Nikkei Mid and Small Cap Index" and the "JPX-Nikkei Index 400."

We have also set ROE as an indicator of sustainable improvement of corporate value, and we will continue to maintain this level at 20% or higher. As a KPI other than ROE, we have set an aggressive level for total return ratio of 50%, maintaining ROE at 20% or higher. The D/E ratio is set at an upper limit of 1.0 times, and while the Company is effectively debt free at present, the D/E ratio is set at a level that is the upper limit in real terms when conducting M&A.

In terms of challenges for the future, we believe it is important to improve efficiency by further incorporating information technology (DX and FinTech) while, at the same time, enhancing customer satisfaction. Since the Company performs the complex task of matching more than 20,000 human resource candidates every day, we would like to introduce a tool that is more convenient for both clients and workers to improve satisfaction and productivity. We have formulated a new Medium-Term Management Plan and set a target of 10.0 billion yen in operating profit for 2024. We will focus on achieving our stated targets by aggressively pursuing M&A while steadily growing our mainstay the "Short-Term Operational Support Business."

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President, Representative Director and CEO	Director and Chairman
Kazuki Sakamaki	Takehito Hirano

Dialogue

As the ally of working people, we believe compliance contributes to raising the level of corporate activities and the Japanese economy.

What has been the driving force behind the Company's growth into the only listed company in short-term operational support services since its founding in 1992?

Hirano The Company was founded at a time when the bubble economy had burst and Japanese-style lifetime employment had started to break down. It was a time when the needs of companies which could no longer sustain the high labor cost ratios of hiring permanent employees, and of workers who wanted to be free to work without being restricted by social frameworks, suddenly became clear. At the time, there were no other human resource businesses specializing in short-term, so the first and foremost factor was that we grasped the trend.

Sakamaki I was in the logistics industry at the time, and looking at the short-term operational matching business from the outside, I thought it was an area that would grow in the future. That was also what motivated me to join the Company.

Hirano What allowed us to grow further from there was that as soon as we began coordinating several hundred people, we were able to systemize our opera-

tions. We successfully adopted office computers before any other companies and develop our own programs to take market share.

How do you perceive the changes in work styles that have occurred in Japanese society over the past 30 years, such as work style reforms and the lifting of bans on side jobs?

Hirano I think the diversification of work styles is great. It leads to people discovering their own potential and growing while developing themselves. It is often considered our business is on the side of corporations, providing inexpensive human resources, but this is the complete opposite of our philosophy. Since our founding, the basis has always been our desire to protect the rights of those who want to work freely, while at the same time providing opportunities for self-fulfillment by making the work environment as good as possible. Sakamaki Over the past 30 years, the awareness of companies and workers has also changed, and I think that the rights of workers have become much stronger. We are proud to be one of the companies that have been supporting this, and we would like to continue to provide support for a variety of situations, including side jobs and career change, in the future.

How do you foresee work styles changing in the future after the COVID-19 pandemic?

Sakamaki I think work styles will become more fluid. The desire of individuals for discretionary freedom will also become more open.

Hirano During the past 2 years, many people have been looking for a side job through our system because the place where they are a permanent employee has been closed. This has also created many examples of people discovering new possibilities in the process and turning a side job into a regular occupation.

Sakamaki Some people have been able to reduce their commuting time by 2 hours a day because of teleworking, so they are trying out other jobs in that time. Our company has a major role to play here, and we see this environment as a tailwind.

What is your approach to sustainability management?

Sakamaki The structural challenges facing Japanese society are a low birthrate and longevity and a declining labor force. We believe that our short-term operational support services will contribute to society and, by extension, to the sustainability of Japanese society by providing solutions to help companies' economic activities run smoothly.

Hirano As has recently been shown the numbers, a concerted effort by the public and private sectors to raise the minimum wage is becoming apparent. As a result, working in variety of occupations is not detrimen- tal, but a source of growth and a strength in an increasing number of cases. By supporting these people through our business and increasing the disposable income of workers, we can contribute economic recovery and raising the level of the economy. I believe this will improve problems that are due to low income, such as difficulty in getting married and the low birthrate, as well as helping to alleviate poverty and grow the economy.

Sakamaki In terms of diversity, we provide specialized services for a diverse range of human resources, regardless of age, gender, or nationality. We are conscious of diversity, including services for seniors and assistance services for foreign nationals, and creating an environment where any person can work at any time with an eye to the future.

Hirano Also, as the ally of working people, we are proud to say that no other company in this industry has created a system that is as useful to society as ours is, while observing compliance. Our goal is to reduce

mismatches and increase employment opportunities as much as possible while protecting the rights of workers, and to provide fulfillment and a sense of purpose in life while ensuring a substantial income. We firmly believe that we can further develop the Company for the next 10 to 20 years by revitalizing corporations in these ways.

What do you want to focus on in terms of the Medium-Term Management Plan?

Sakamaki We have set a target of 10.0 billion yen in operating profit in 2024, and achieving this is our primary commitment. The "Short-Term Operational Support Business" will be at the center of this. We will promote the growth of newly established businesses and subsidiaries acquired through M&A during the previous Medium-Term Management Plan, while also utilizing DX, fintech, and HR tech to improve services and productivi- ty, and actively engaging in M&A in peripheral areas. Hirano On the other hand, once more, we will protect the rights of workers while observing compliance. Achieving a balance based on the SDGs is our major proposition.

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Value Creation Process

INPUT

Supplying a place

Short-Term Operational

to work

OUTPUT

Support Business

Job seekers

Employers

VALUE

Sales

Security,

Other

Support

usinesses

Business

Human capital

Social capital

Financial

capital

Manufactured

capital

	Number of employees	1,244 persons
	Number of temporary employees	1,521 persons
	Years in business	29 years
	Number of clients	59,328 companies
	Number of registrations	7.23 million people
	Equity	19,526 million yen
	Equity-to-asset ratio	66.23%
	Cash and cash equivalents	17,410 million yen
	Number of consolidated subsidiaries	17 companies
	Number of Group Networks	183 sites
	Amount of capital investment	179 million yen

By supplying people with short-term work opportunities tailored to their lifestyle needs, the Fullcast Group is able to"unlock a new labor force"and support every person to"success in workplaces where they can shine."We believe this is our mission. We will create diverse value in the"Short-Term Operational Support Business,"which is also the core business of the Fullcast Group, and will leverage our brand to recruit many people who want to work, as well as focusing on actualizing the potential labor force and developing the capabilities of short-term human resources. We will contribute to building a sustainable society through the realization of the Company's corporate philosophy, which is"Providing the best place for people to bring out their best."

Figures as of December 31, 2021

OUTCOME

Recognized social issues

Sustainability and Corporate Governance

Human capital

Social capital

Diversity capital

Financial capital

Manufactured

capital

	Annual number of hires	448,356 persons
	Annual number of operating workers	235,214 persons
	Annual number of customers	29,064 companies
	Annual number of new customers	6,948 companies
	Percentage of female employees,		64.60%
	including permanent and temporary employees
	Percentage of female managers		15.30%
	Percentage of female operating workers
	in Placement and Dispatching, etc. in the		48.60%
	"Short-Term Operational Support Business"
	Net sales	52,366 million yen
	Operating profit	7,592 million yen
	EPS		137.34 yen
	Free cash flow	6,269 million yen
	ROE		27.82%
	Annual number of matches		5,598,248
	Number of matching per hour		2,845

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