S Pool : Notice of formulation of new medium-term management plan

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January 13, 2021

Company name: S-Pool, Inc. Representative: Sohei Urakami, Chairman and CEO (Code: 2471, 1st section of TSE) Contact: Naoshi Arai, President's office

Phone: [phone]

To whom it may concern:

Notice of formulation of new medium-term management plan

As summarized below, S-Pool, Inc. ("the Company" hereinafter) has formulated a new medium-term management plan for the period ending November 2021 through the period ending November 2025.

【Overview of new medium-term management plan for the period ending November 2021 through the period ending November 2025】

１．Awareness of environmental conditions and issues to address

In addition to the topics clearly identified in previous medium-term management plans, the new plan identifies issues that the Company needs to address in responding to its external environment, including market trends, economic conditions, labor conditions, and certain specific factors.

［Issues to address］

• Continuing progress in existing businesses in accordance with environmental changes
• Building the third and fourth pillars of earnings for the coming decade
• Enhancements in systems to support sustainable growth based on ESG management ２．Basic policy
  Creating both social value and economic value

３．Numerical plans

［Period ending November 2025］Net sales 41 billion yen, operating profit 5 billion yen

４．Management strategies

［Business strategy(i)］ Maintaining organic growth by building on existing businesses ［Business strategy(ii)］ Securing growth opportunities in new business domains

［Organizational strategy］Enhancing management foundations based on ESG

５．Financial strategies

［Period ending November 2025］Consolidated dividend payout ratio of 30% or more Maintaining high ROE

Please refer to the attached documents for more information on the plan.

Medium-Term Management Plan

FY2021-FY2025

January 13, 2021

S-Pool, Inc.

First Section, Tokyo Stock Exchange (2471)

Contents

1. Review of the previous management plan
2. Awareness of environmental conditions and issues to address
3. Overview of the new plan
4. Business strategies
5. Organizational strategies

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Review of the previous management plan

• Both profitability and operating profit margins improved dramatically. We achieved

the target operating profit margin of 10%.

Themes of the previous	[Indicators]	Five-year results
management plan

Achieving operating profit margin of 10% by FY2020

Promoting portfolio

management and strengthening the added value of our services

Business deployment in areas of high growth potential in which we see high potential to contribute to society

Paying stable and continuous

dividends

[Operating profit margin]

[Operating profit margin by segment]

[Gross profit margin]

[Net sales of subject

businesses]

[Dividend amounts]

Operating	 Human resource solutions	 Business solutions
profit margin
by segment		31%
	FY15		FY20	43%
	57%
69%
[Gross profit	25.3%		29.0%
margin]
		[FY2015]		[FY2020]
Special Needs		568 million yen		3,335 million yen
Employment Service
OMUSUBI Employment	0 yen		564 million yen
Support Service			Approx.
Total		568 million yensevenfold	3,899 million yen

• Term-enddividend  Commemorative dividend

					0.6		3.3
0.4	0.4	0.72	1.0	1.4
FY15	FY16	FY17	FY18	FY19	FY20

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Awareness of environmental conditions and issues to address

Awareness of environmental conditions

[Labor environment]

• Accelerating fluidity of human resources

• Shrinking labor force

• Decreasing effective ratio of job openings to applicants

	[Market environment]
[Medium-long term]	〇 Growing need for outsourcing
	△ Reduced labor demand due to
[Long term]	cyclical slowdown
[Short term]	△ Changing competitive environment
	(arrival of competitors)

[Short-medium term] [Short term]

[Short-long term]

[Economic environment]			[Factors specific to the Company]
△ Sense of economic uncertainty	[Short-medium term]		〇 Expanding obligation of employing	[Short-long term]
△ Impact of COVID-19	[Short term]		people with disabilities
△ Declining corporate business	[Short-medium term]		〇 Growing e-commerce market	[Short-long term]
performance			〇 Strengthening movement toward	[Short-long term]
			environmental protection

Issues to address

• Continuing progress in existing businesses in accordance with environmental changes
• Building the third and fourth pillars of earnings for the coming decade
• Enhancements in systems to support sustainable growth based on ESG management

Identifying sudden changes in the external environment and implementing

innovations to establish a business structure for the next generation

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Overview of the new plan (FY2021-FY2025)

Basic policy

Creating both social value and economic value

Numerical plans

FY2025: Net sales 41 billion yen,

operating profit 5 billion yen

Management strategies

Business strategy (i)

Business strategy (ii)

Organizational strategy

Financial strategies

FY2025

Maintaining organic growth by building on existing businesses

Securing growth opportunities in new business domains

Enhancing management foundations based on ESG

Consolidated dividend payout ratio of 30% or more Maintaining high ROE

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Business strategy (i)

Organic growth by building on existing businesses

Human resource solutions

Social significance

Human

Resource

Outsourcing Main measures Services

Realizing diverse work styles for young people with no or little work experience

• Securing the top market share in call center placement
• Uncovering new domains for personnel placement
• • Expanding job types (developing businesses in which work is difficult to automate)
  • Regional expansion (advancing into new regions)

Business solutions

Social significance

Special

Needs

Employment Main measures Service

Contributing to society by employing as many people with disabilities as possible

• Securing a position among the leaders in farm services (Sections managed: 10,000 sections; employees with disabilities: 5,000 persons; farms created: 60)
• Developing a diverse work style menu suited to the individual needs and capabilities of people with disabilities

Logistics	Social significance	Establishing next-generation,eco-friendly logistics services
Outsourcing	Main measures	•	Business expansion based on e-commerce
Services
•	Opening our own in-house center, Japan's first zero emissions center

OMUSUBI Social significance Employment

Support Main measures Service

Supporting regional revitalization through job creation

• Securing the top market share in support for hiring of part-time and temporary workers
• Providing comprehensive services from hiring to retention

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Business strategy (ii)

Securing growth opportunities in new business domains

Environmental business domain

Movement toward effectively zero greenhouse gas emissions

		[Step 1]			[Step 2]		[Step 3]	[Near Future]
Corporate CO2		Making emissions			Company emissions		Complementing results	Company emissions
reductions process		volumes visible			reduction efforts		left unachieved	reduction obligations
		Support for emissions			Emissions reductions		Carbon credit	Offering CO2 emissions
Our services
	calculations			consulting		brokering	reduction programs
					(Now provided)				(Now under development)

Establishing a new earnings pillar in the environmental field as the movement accelerates toward

shifting from CO2 reduction efforts to obligations.

Business process outsourcing (BPO) business domain

External environment

[Rising BPO needs]

Accelerating cost reductions and business efficiency improvements (Outsourcing indirect operations)

Internal environment	Targeted domains
[Establishing the environment	[Private sector]	E-commerce, human
needed to ensure acceptance of		resource domain
BPO subcontracting]	(Fields peripheral to existing businesses)
Drawing on regional facilities for
[Government]	Administrative
hiring support services
	operations in general

Using potential community resources (human resources and unused facilities), and supporting a shift

toward corporate management through outsourcing

Harnessing corporate venture capital (CVC) funds

Accelerating the growth of existing businesses and uncovering new businesses through investments

in startups that promise business synergies

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Organizational strategy

Enhancing management foundations based on ESG

Priorities

• Lessening our environmental impact through autonomous eco-friendly

initiatives

• Participation in the RE Action initiative* in the logistics business

Environment • Contributing to solutions to environmental challenges through our

			business activities
			✓ Proactive business development in the environmental domain based on Blue Dot
			Green
		•	Promoting diversity and inclusion
			✓ Promoting women in the workplace (making working environments more comfortable,
Social			proactive appointment to managerial positions)
	•	Hiring and training human resources with high levels of sensitivity to
			social issues
			✓ Training human resources able to identify societal changes and issues with sensitivity
			and take action toward solutions on their own
		•	Continuing a high degree of transparency in management and
Governance			appropriate disclosure
		✓ Appropriately disclosing financial and nonfinancial information, and promoting
			constructive dialogue with investors

• • Thorough compliance and information security
• RE Action is a new framework for promoting a full shift to renewable energy, under which businesses, local governments, educational institutions, medical institutions, and other organizations declare their intentions and actions for meeting their power needs with 100% renewable energy.

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S-Pool, Inc.

[Contact] Investor Relations at the President's Office

TEL: [phone]

E-mail: [e-mail]

Forecasts of business results and other forward-looking statements contained in this document are based on information available to the Company at the time of release. Actual results may vary due to various factors. No promise or guarantee is made regarding future figures or measures.

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