Outlined below is the basic policy underlying the management of the S-Pool Group.
Here, we describe our basic philosophy, management indicators, and issued to be handled.

1. Basic policy of Company management

In light of its mission “Supporting corporate transformation for all our customers and embracing the power of outsourcing to solve social issues,” the Group seeks to create new social value and to serve as an essential presence by promoting social businesses that deliver solutions to social issues. Based on the fundamental policy of portfolio management, the Group aims to be a corporate entity capable of withstanding any changes in the external environment by developing businesses across multiple business domains that contribute significantly to society and create added value.

2. Target management indicators

In addition to numerical targets of 41 billion yen in net sales and 5 billion yen in operating profit in the fiscal period ending November 2025, the Group seeks to maintain a consistent operating profit margin of at least 10%. It is also seeking to achieve a consolidated payout ratio of at least 30% in the near future.

3. Medium-/long-term management strategy

The Group's medium-term vision calls for balancing both social value and economic value by delivering new value through its social businesses. By securing high profitability, it strives to balance investment for sustained growth and stable returns to shareholders. The Group has established the following three priority strategies based on the fundamental strategy of portfolio management to build a group of companies resistant to environmental changes:

• Continuing organic growth by further exploring the potential of existing businesses
• Securing growth opportunities in new business domains
• Strengthening management foundations centered on ESG

4. Priority business and financial topics

The Group recognizes the following five points as issues to be addressed in order to achieve sustained growth:

① Continual development of existing businesses
The Group considers that building stable revenue foundations through the continual development of existing businesses is essential to realizing sustained growth. In its core existing businesses, the Group will diversify the earnings structure by developing new businesses derived from existing businesses while securing sustained revenues in existing business domains. To ensure long-term growth, the Group will strive to build strong relationships with customers while establishing solid competitive advantages based on sustained improvements in existing services and the added value they provide.

② Reduced dependence on main businesses
The two main businesses of Temporary Staffing Services and Special Needs Employment Services account for 93.3% of the Group's operating profit. The Group recognizes the urgent need to build new revenue sources to safeguard against sudden declines in the sales generated by these businesses due to a changing business environment or other factors. Specifically, it seeks to promote existing businesses such as Logistics Outsourcing Services and Employment Support Services while securing growth opportunities in new business domains such as business process outsourcing (BPO) services for local governments and environmental businesses, areas where future market growth is likely.

③ Promoting the digital transformation (DX)
Spurred by COVID-19, our lives and economic activities are rapidly evolving to modes premised on an online environment. Development of better IT systems is essential to create environments to enable diverse work styles from the perspective of promoting diversity as well. To adapt to such environmental changes, the Group will further enhance its competitive strengths by improving business efficiency and productivity and by strengthening its sales capabilities through promoting use of IT, digital technologies, and databases suited to the digital transformation (DX).

④ Hiring and developing human resources characterized by keen social sensitivity
We consider it vital to continue to hire and train outstanding human resources who grasp our Group vision, based on a policy linking employee growth to Company growth. In addition to proactively hiring human resources who possess the qualities needed to advance our social businesses—specifically, the ability to discern societal changes and challenges with great sensitivity and the ability to take active steps toward solutions—we will also focus on training the younger generation of leaders.

⑤ Diversity promotion
From the long-term perspective, the Group seeks to enhance competitive strengths by creating opportunities for women and other diverse human resources to thrive. To enable all employees to work over many years with peace of mind, the Group focuses on improving working environments by adopting personnel systems tailored to the distinct features of each Group company, by keeping employee turnover as low as possible through efforts such as job rotations based on development programs for new graduate hires, by making full matching contributions to the employee stock ownership program (through which the Company pays the same amount as contributed by the employee), and by utilizing a boomerang program to rehire former employees.