ウィルグループ（6089） – [Delayed]Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [IFRS]

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. May 11, 2022 Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Under IFRS) Company name: WILL GROUP, INC. Listing: Securities code: URL: Representative: Inquiries: Tokyo Stock Exchange 6089 https://willgroup.co.jp/en/ Shigeru Ohara, President and Representative Director Satoshi Takayama, Executive Officer and General Manager of Management Department +81-3-6859-8880 Telephone: Scheduled date of annual general meeting of shareholders: Scheduled date to commence dividend payments: Scheduled date to file annual securities report: Preparation of supplementary material on financial results: Holding of financial results briefing: June 21, 2022 June 22, 2022 June 21, 2022 Yes Yes 1. Consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (1) Consolidated operating results (Percentages indicate year-on-year changes.) (Yen amounts are rounded down to millions, unless otherwise noted.) Revenue Operating profit Profit before tax Profit Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen % 131,080 118,249 10.9 (3.0) 5,472 4,030 35.8 (2.8) 5,293 3,788 39.7 (6.6) 3,854 2,678 43.9 (1.3) Profit attributable to owners of parent Total comprehensive income Basic earnings per share Diluted earnings per share Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % 3,286 2,363 39.0 (0.7) 4,683 4,425 5.8 204.8 Return on equity attributable to owners of parent Ratio of profit before tax to total assets Ratio of operating profit to revenue Yen 147.03 106.35 % 4.2 3.4 Yen 144.76 104.59 Fiscal year ended March 31, 2022 March 31, 2021 % 33.5 35.1 % 10.7 8.3 Reference: Share of profit (loss) of investments accounted for using equity method For the fiscal year ended March 31, 2022: For the fiscal year ended March 31, 2021: ¥(18) million ¥(5) million (2) Consolidated financial position Total assets Total equity Equity attributable to owners of parent Ratio of equity attributable to owners of parent to total assets Equity attributable to owners of parent per share As of March 31, 2022 March 31, 2021 Millions of yen Millions of yen Millions of yen 52,350 46,760 13,121 10,027 11,398 8,240 % 21.8 17.6 Yen 505.08 370.13 (3) Consolidated cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen Millions of yen Millions of yen Millions of yen 4,350 4,316 (306) (433) (2,959) (2,646) 8,973 7,455 2. Cash dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Total cash dividends (Total) Payout ratio (Consolidated) Ratio of dividends to equity attributable to owners of parent (Consolidated) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) – – – Yen 0.00 0.00 0.00 Yen Yen Yen Yen Millions of yen % % – – – 24.00 24.00 34.00 34.00 44.00 44.00 541 776 22.6 23.1 29.5 7.9 7.8 3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) Six months ending September 30, 2022 Fiscal year ending March 31, 2023 Revenue Operating profit (Percentages indicate year-on-year changes.) Profit before tax Profit Millions of yen % Millions of yen % Millions of yen % Millions of yen % 67,000 140,000 4.8 6.8 2,250 (16.2) 2,190 (19.4) 1,575 (21.1) 5,600 2.3 5,490 3.7 3,870 0.4 Profit attributable to owners of parent Basic earnings per share Six months ending September 30, 2022 Fiscal year ending March 31, 2023 Millions of yen % 1,250 (26.4) 3,330 1.3 Yen 55.93 148.98 (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the * Notes change in scope of consolidation): Yes Newly included: – companies Excluded: 1 company Name: WILLOF FACTORY, Inc. (2) Changes in accounting policies and changes in accounting estimates (i) Changes in accounting policies required by IFRS: None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (3) Number of issued shares (ordinary shares) (i) Total number of issued shares at the end of the period (including treasury shares) (ii) Number of treasury shares at the end of the period As of March 31, 2022 As of March 31, 2021 As of March 31, 2022 As of March 31, 2021 (iii) Average number of shares outstanding during the period Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 22,852,200 shares 22,554,500 shares 284,820 shares 290,379 shares 22,351,306 shares 22,226,808 shares Note: The number of treasury shares at the end of the period includes the number of shares owned by executive stock compensation trust. (279,441 shares as of March 31, 2022 and 285,000 shares as of March 31, 2021) [Reference] Overview of non-consolidated financial results Non-consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (1) Non-consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen % 4,541 4,576 (0.8) 30.7 2,002 1,558 28.5 27.7 1,950 2,019 (3.4) 128.8 2,795 1,819 53.7 5.6 Fiscal year ended March 31, 2022 March 31, 2021 Basic earnings per share Diluted earnings per share Yen 125.05 81.84 Yen 123.12 80.48 (2) Non-consolidated financial position As of March 31, 2022 March 31, 2021 Reference: Equity Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 21,555 20,728 12,420 10,023 % 57.6 48.3 Yen 550.04 449.52 As of March 31, 2022: As of March 31, 2021: ¥12,413 million ¥10,008 million < Reasons for the differences between the non-consolidated financial results for the previous fiscal year and those for the fiscal year under review > Non-consolidated financial results for the fiscal year under review differ from those for the previous fiscal year as a result of increases in dividends from subsidiaries and associates, management fee income, and gain on sale of shares of subsidiaries and associates, etc. * Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special matters The forward-looking statements shown in these materials, including earnings forecasts, are based on information currently available to the Company and on certain assumptions deemed to be reasonable. As such, they do not constitute guarantees by the Company of future performance. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to “(5) Future outlook” under “1. Overview of operating results and others” on page 5 of the attached material for the assumptions on which earnings forecasts are based, and cautions concerning the use thereof. WILL GROUP, INC. (6089) Attached Material Index 1. Overview of operating results and others …………………………………………………………………………………… 2 (1) Overview of operating results for the fiscal year …………………………………………………………………. 2 (2) Overview of financial position for the fiscal year ………………………………………………………………… 4 (3) Overview of cash flows for the fiscal year ………………………………………………………………………….. 4 (4) Basic policy on profit distribution, and dividends for current and next fiscal years ………………….. 5 (5) Future outlook ………………………………………………………………………………………………………………… 5 2. Basic views on the selection of accounting standards ………………………………………………………………….. 7 3. Consolidated financial statements and significant notes thereto ……………………………………………………. 8 (1) Consolidated statement of financial position ………………………………………………………………………. 8 (2) Consolidated statement of profit or loss and consolidated statement of comprehensive income .. 10 (3) Consolidated statement of changes in equity …………………………………………………………………….. 12 (4) Consolidated statement of cash flows ………………………………………………………………………………. 13 (5) Notes to the consolidated financial statements …………………………………………………………………… 14 Notes on premise of going concern ………………………………………………………………………………….. 14 Segment information, etc. ………………………………………………………………………………………………. 14 Per share information …………………………………………………………………………………………………….. 18 Significant subsequent event …………………………………………………………………………………………… 18 – 1 – WILL GROUP, INC. (6089) 1. Overview of operating results and others (1) Overview of operating results for the fiscal year During the fiscal year ended March 31, 2022, the progress made in vaccinations and the lifting of lockdowns in many countries resulted in the global economy trending towards recovery. Nevertheless, with the expansion and prolongation of inflationary pressure, the switch towards tighter monetary policy by many countries, shortages of components, mainly semiconductors, the continuation of worldwide supply chain disruption caused by logistics delays, and the situation in Russia and Ukraine, the outlook has become uncertain. In Japan, the spread of COVID-19 resulted in ongoing declarations of states of emergency, mostly in the Tokyo metropolitan area, but recently such measures have become less rigorous and there are signs of a recovery in business conditions. However, the risk of a downturn in overseas economies, rising prices for energy and raw materials, and volatility in foreign exchange rates require careful attention. Under these circumstances, the Group worked on the WORK SHIFT Strategy, which aims to raise the operating margin through a portfolio shift and digital shift in preparation for achieving the goals of the “WILL-being 2023” Medium-Term Management Plan, which enters its final year in the fiscal year ending March 31, 2023. In Japan, with the intermittent states of emergency being declared mainly in the Tokyo metropolitan area, the factory outsourcing domain and areas of the sales outsourcing domain other than communications were negatively affected by the spread of COVID-19, but in other business domains performed strongly. In addition, in preparation for the Perm SHIFT (“Perm” refers to permanent placement, and temporary staffing for highly specialized fields), we made upfront investments in focus areas such as permanent placement in the nursing care domain, increasing the number of sales and consultants staff in the construction management engineer human resources service domain, and the HR support for startups domain. In Singapore and Australia, which are the main areas in which the Company has expanded its business overseas, COVID-19 led to measures such as the lockdowns of cities. Despite this, business conditions are beginning to recover, demand for human resources is increasing, and both temporary staffing and permanent placement turned in strong performances. As a result of the above, revenue during the fiscal year under review was ¥131,080 million (up 10.9% year on year), operating profit was ¥5,472 million (up 35.8%), profit before tax was ¥5,293 million (up 39.7%), profit was ¥3,854 million (up 43.9%), profit attributable to owners of parent was ¥3,286 million (up 39.0%), and EBITDA (operating profit + depreciation and amortization + impairment losses) was ¥7,556 million (up 20.7%). Results of operations by segment are as follows: In terms of the accounting method for reportable business segments, we had previously adopted a method based on Japanese GAAP to which certain adjustments were made. After one of its regular reviews of segment information, the Group decided to align the accounting method with the accounting policies of the Group from the first quarter of the fiscal year ended March 31, 2022. Following this change, reportable segment information for the previous fiscal year has been restated. (i) Domestic WORK Business The Domestic WORK Business offers temporary staffing, permanent placement and business process outsourcing services in Japan specifically for categories such as the sales outsourcing domain, call center outsourcing domain, factory outsourcing domain and nursing care domain. The demands for sectors such as apparel and sales promotion in the sales outsourcing domain and factory outsourcing domain decreased due to the continued impact of the spread of COVID-19. On the other hand, demand in the communications area of the sales outsourcing domain, call center outsourcing domain, nursing care domain, and HR support for startups domain, was resilient and performance was strong. To prepare for the era of coexistence with coronavirus as well as the post-coronavirus era, each sector also focused on developing clients for new services, including a sales agency, and a contact center service in which all the staff work from home. – 2 – WILL GROUP, INC. (6089) As for profit, in permanent placements for the nursing care domain and the construction management engineer human resources services domain, upfront investments to increase the number of sales and consultants staff resulted in lower earnings. As a result of the above, the Domestic WORK Business recorded external revenue of ¥80,726 million (up 0.8% year on year), and segment profit of ¥4,448 million (down 6.6%). (ii) Overseas WORK Business In the human resources services that we are developing in the ASEAN region and Oceania, the spread of COVID-19 resulted in measures such as the lockdowns of cities, but demand for human resources was strong, and both temporary staffing and permanent placement turned in strong performances. On the exchange rate, both the Singaporean and the Australian dollar depreciated against the yen compared to the same period of the previous year. As for profit, in addition to the increase in personnel expenses that we had previously been controlling, there was a decrease in income from employment support government subsidies aimed at tackling COVID-19 that we received in Singapore in the previous fiscal year, but the increase in permanent placement sales led to a rise in gross profit and to higher earnings. As a result of the above, the Overseas WORK Business recorded external revenue of ¥48,746 million (up 32.0% year on year), and segment profit of ¥3,348 million (up 72.4%). (iii) Others In the Others segment, we worked to expand non-labor-intensive businesses by strengthening the development of new platforms such as “Hourmane,” a working time management system for foreign workers, and “ENPORT,” foreigners life support service. Due to the spread of COVID-19, restrictions on entry to Japan made it difficult to visit the country and resulted in a slump in the number of users. Because we continued to invest in the development of our new platform, the segment recorded a loss. As a result of the above, the Others segment recorded revenue of ¥1,607 million (up 25.7% year on year), and a segment loss of ¥342 million (a segment loss of ¥413 million was recorded in the previous fiscal year). – 3 – (2) Overview of financial position for the fiscal year WILL GROUP, INC. (6089) Assets Current assets as of March 31, 2022 were ¥27,289 million, an increase of ¥3,718 million from the end of the previous fiscal year. This was mainly due to increases in trade and other receivables of ¥2,763 million, and in cash and cash equivalents of ¥1,517 million, despite a decrease in other financial assets of ¥560 million. Non-current assets stood at ¥25,061 million, an increase of ¥1,870 million from the end of the previous fiscal year. This was mainly due to increases in right-of-use assets of ¥1,093 million, goodwill of ¥359 million, deferred tax assets of ¥172 million, and property, plant and equipment of ¥141 million. As a result, total assets amounted to ¥52,350 million, an increase of ¥5,589 million from the end of the previous fiscal year. Liabilities Current liabilities as of March 31, 2022 were ¥29,361 million, an increase of ¥4,571 million from the end of the previous fiscal year. This was mainly due to increases in other financial liabilities of ¥1,645 million, trade and other payables of ¥1,536 million, and borrowings of ¥920 million. Non-current liabilities stood at ¥9,867 million, a decrease of ¥2,075 million from the end of the previous fiscal year. This was mainly due to decreases in borrowings of ¥1,721 million, and in other financial liabilities of ¥277 million. As a result, total liabilities amounted to ¥39,228 million, an increase of ¥2,495 million from the end of the previous fiscal year. Equity Total equity as of March 31, 2022 was ¥13,121 million, an increase of ¥3,093 million from the end of the previous fiscal year. This was mainly due to increases in retained earnings of ¥2,750 million, and in other components of equity of ¥808 million, despite a decrease of ¥480 million in capital surplus. As a result of the above, the ratio of equity attributable to owners of parent to total assets was 21.8% (17.6% at the end of the previous fiscal year). After excluding the effect from temporary factor of ¥3,509 million in written put options (¥3,300 million at the end of the previous fiscal year), the adjusted figure for the ratio of equity attributable to owners of parent to total assets became 28.5% (24.7% at the end of the previous fiscal year). (3) Overview of cash flows for the fiscal year Cash and cash equivalents at the end of the current fiscal year increased ¥1,517 million from the end of the previous fiscal year to ¥8,973 million. Status of cash flows in the fiscal year under review and the main factors driving them are as follows: Cash flows from operating activities Net cash provided by operating activities was ¥4,350 million (¥4,316 million provided in the previous fiscal year). This was mainly due to a recording of profit before tax of ¥5,293 million and depreciation and amortization of ¥2,084 million, despite factors such as trade receivables of ¥2,494 million and income taxes paid of ¥1,104 million. Cash flows from investing activities Net cash used in investing activities was ¥306 million (¥433 million used in the previous fiscal year). This was mainly due to proceeds from investing activities and other transactions of ¥475 million, despite factors such as purchase of property, plant and equipment, and intangible assets of ¥741 million. Cash flows from financing activities Net cash used in financing activities was ¥2,959 million (¥2,646 million used in the previous fiscal year). This was mainly due to repayments of long-term borrowings of ¥2,965 million, and purchase of shares of subsidiaries not resulting in change in scope of consolidation of ¥1,969 million, despite – 4 – WILL GROUP, INC. (6089) factors such as proceeds from sale of shares of subsidiaries not resulting in change in scope of consolidation of ¥1,360 million, and proceeds from long-term borrowings of ¥1,165 million. (4) Basic policy on profit distribution, and dividends for current and next fiscal years Returning profit to the Company’s shareholders and maintaining sufficient retained earnings to achieve stable future business development are the fundamental principles adopted by the Company. Specifically, after taking into account the factors such as the status of operating performance in each fiscal year, we aim for a total payout ratio(*) of 30% relative to earnings forecasts at the beginning of the fiscal year to enhance returns to shareholders while securing funds for growth investments. In addition, the policy of the Company is to pay dividends of surplus once a year, but the Company stipulates in its Articles of Incorporation that it may pay an interim dividend provided for in Article 454, paragraph (5) of the Companies Act. The bodies that decide dividends from surplus are the general meeting of shareholders for year-end dividends, and the Board of Directors for interim dividends. For the fiscal year under review the Company proposes to pay a year-end dividend per share of ¥34 (ordinary dividend of ¥34) in accordance with the upward revision to the dividend forecast announced on November 9, 2021. In that event, the total payout ratio would be 23.6% (42.2% relative to the earnings forecast at the beginning of the fiscal year). In addition, for the fiscal year ending March 31, 2023, we plan to increase the dividend by ¥10 per share to ¥44, with the aim of achieving a total payout ratio of 30% relative to earnings forecast at the start of the fiscal year. In that event, the total payout ratio would be 30.2%. (*) Total payout ratio: The ratio of the amount of dividends plus purchase of treasury shares to profit attributable to owners of parent (5) Future outlook The Group believes it is necessary to alter its earnings structure in order to achieve sustainable growth, and has positioned the “WILL-being 2023” Medium-Term Management Plan announced on May 12, 2021 (“the Plan”) as the foundation-building phase of this initiative. The basic policy incorporated by the Plan is our WORK SHIFT strategy, which aims to utilize a portfolio shift and digital shift to improve the operating margin and achieve a highly profitable structure. It also specifies revenue, operating profit, and operating margins as the basis for numerical management targets, but operating profit and operating margin exceeded targets for the fiscal year ended March 31, 2022, and we aim to fully achieve these objectives, including key strategies, in the fiscal year ending March 31, 2023. The basic policy and key strategies of the Plan are as follows. Basic policy of the Plan The basic policy incorporated by the Plan is our WORK SHIFT strategy, which aims to utilize a portfolio shift and digital shift to improve the operating margin and achieve a highly profitable structure. The portfolio shift entails efforts to maximize and optimize growth opportunities through Perm SHIFT (“Perm” refers to permanent placement and temporary staffing for highly specialized fields). The digital shift entails efforts to maximize and optimize employment opportunities focused on productivity improvement and stability of the business by promoting digitalization in the Temp domain (“Temp” refers to temporary staffing and business process outsourcing). As for business portfolio management, by dividing the businesses of the Group into five domains and optimizing the structure of the business portfolio, we will improve overall profitability, achieve the optimal allocation of management resources and enhance investment efficiency. The Plan’s numerical management targets The numerical management targets for the fiscal year ending March 31, 2023, which is the final year of the Plan, are revenue of ¥133,500 million, operating profit of ¥5,350 million, and an operating margin of 4.0%. – 5 – WILL GROUP, INC. (6089) Key strategies In order to achieve the management targets in the Plan, we will execute the following four key strategies. Strategy I Utilizing portfolio shift to improve profitability Both in Japan and overseas, we seek to expand our business in Perm area with a higher gross profit margin than in Temp area. Within that domain, in particular, we will expand in the fields of nursing care and construction management engineers, where labor shortages have become the norm. Strategy II Utilizing digital shift to improve productivity In order to improve productivity in the Temp area, we will take measures to improve efficiency by promoting digitalization, such as moving the operations online and business automation. We are also working to improve efficiency through the integration of consolidated subsidiaries, the integration of systems, the consolidation of operations and other measures. Strategy III Searching for next strategic investment domain In terms of the next strategic investment, we will search for business with a high operating margin in domains peripheral to our existing businesses, with the aim of improving future consolidated operating margins. Strategy IV Financial strategy To prepare for future growth investments and achieve more appropriate financial leverage, we are targeting a ratio of equity attributable to owners of parent to total assets of at least 20%. In addition to targeting improvements in profitability, we seek to raise capital efficiency by setting an ROIC target of at least 20%. In order to enhance returns to shareholders while securing funds for future growth investments, our shareholder returns is to target a total payout ratio of 30% relative to earnings forecasts at the beginning of the fiscal year. Full-year forecasts of consolidated financial results for the fiscal year ending March 31, 2023 Due to concerns about a resurgence of COVID-19 and the situation in Russia and Ukraine, the economic outlook requires careful attention, but in Japan, and in Singapore and Australia, which are the two main areas where we are developing the business overseas, we expect demand for human resources to be robust. In the Domestic WORK Business, the factory outsourcing domain, and the apparel and sales promotion segments of the sales outsourcing domain will remain affected by COVID-19, but in other domains we project strong demand. In addition, with the easing of restrictions on entering Japan, we expect human resources demand for foreign workers to gradually return to pre-COVID-19 levels. In a continuation of our initiatives in the fiscal year ended March 31, 2022, we plan to implement upfront investments (¥1,300 million) to increase the number of sales and consultants staff, and hire construction management engineers, for the focus areas of permanent placement in the nursing care domain, the construction management engineer human resources services domain, and the HR support for startups domain, and thus achieve our scenarios over the medium to long term. In the Overseas WORK Business, business conditions are heading towards recovery in Singapore and Australia, and although we expect permanent placement demand to slow, we project that strong demand for human resources in the fiscal year under review will continue this fiscal year. For the fiscal year ending on March 31, 2023, we forecast revenue of ¥140,000 million (¥6,500 million over the Plan target), operating profit of ¥5,600 million (¥250 million over), operating margin of 4.0% (in line with the Plan), profit before tax of ¥5,490 million, profit of ¥3,870 million, profit attributable to owners of parent of ¥3,330 million, and EBITDA of ¥7,670 million. The exchange rate assumptions underlying these forecasts are ¥79/SGD (¥83/SGD in the previous fiscal year) and ¥78/AUD (¥83/AUD in the previous fiscal year). * The forward-looking statements above, including earnings forecasts, are based on information currently available to the Company and on certain assumptions deemed to be reasonable. As such, they do not constitute guarantees by the Company of future performance. Actual results may differ significantly from these forecasts for a number of reasons. We will continue to carefully monitor the impact on the businesses of the Group, and make prompt disclosure in the event that revisions become necessary going forward. – 6 – WILL GROUP, INC. (6089) 2. Basic views on the selection of accounting standards Based on its intention to further promote the global expansion of its business, and with the objective of helping to improve the international comparability of financial information in the capital markets, the Will Group has voluntarily adopted International Financial Reporting Standards (IFRS), beginning with the consolidated financial statements included in the annual securities report for the fiscal year ended March 31, 2019. – 7 – 3. Consolidated financial statements and significant notes thereto (1) Consolidated statement of financial position WILL GROUP, INC. (6089) (Millions of yen) As of March 31, 2021 As of March 31, 2022 Assets Current assets Cash and cash equivalents Trade and other receivables Other financial assets Other current assets Total current assets Non-current assets Property, plant and equipment Right-of-use assets Goodwill Other intangible assets Other financial assets Deferred tax assets Other non-current assets Total non-current assets Total assets Investments accounted for using equity method 7,455 14,694 690 729 23,570 1,082 5,715 6,155 6,049 495 1,151 1,678 863 23,190 46,760 8,973 17,458 129 728 27,289 1,223 6,809 6,514 6,154 477 1,208 1,850 822 25,061 52,350 – 8 – As of March 31, 2021 As of March 31, 2022 WILL GROUP, INC. (6089) (Millions of yen) 13,760 4,865 3,600 514 2,048 24,790 3,923 6,563 1,289 166 11,943 36,733 2,089 (1,786) (279) (343) 8,559 8,240 1,786 10,027 46,760 15,297 5,786 5,245 1,195 1,836 29,361 2,202 6,285 1,202 177 9,867 39,228 2,163 (2,266) (274) 464 11,310 11,398 1,723 13,121 52,350 Liabilities Current liabilities Trade and other payables Borrowings Other financial liabilities Income taxes payable Other current liabilities Total current liabilities Non-current liabilities Borrowings Other financial liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity Share capital Capital surplus Treasury shares Other components of equity Retained earnings Total equity attributable to owners of parent Non-controlling interests Total equity Total liabilities and equity – 9 – WILL GROUP, INC. (6089) (2) Consolidated statement of profit or loss and consolidated statement of comprehensive income Consolidated statement of profit or loss (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Revenue Cost of sales Gross profit Other income Other expenses Operating profit Finance income Finance costs Profit before tax Selling, general and administrative expenses Share of loss of investments accounted for using equity method Income tax expense Profit Profit attributable to Owners of parent Non-controlling interests Earnings per share Basic earnings per share (Yen) Diluted earnings per share (Yen) 118,249 94,192 24,056 20,463 519 82 4,030 (5) 11 247 3,788 1,110 2,678 2,363 314 106.35 104.59 131,080 102,314 28,765 23,585 387 95 5,472 (18) 52 212 5,293 1,439 3,854 3,286 568 147.03 144.76 – 10 – Consolidated statement of comprehensive income Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 WILL GROUP, INC. (6089) (Millions of yen) 2,678 3,854 Profit Other comprehensive income Items that will not be reclassified to profit or loss Net change in fair value of equity instruments designated as measured at fair value through other comprehensive income Total of items that will not be reclassified to profit or loss Items that may be reclassified to profit or loss Cash flow hedges Exchange differences on translation of foreign operations Total of items that may be reclassified to profit or loss Other comprehensive income, net of tax Comprehensive income Comprehensive income attributable to Owners of parent Non-controlling interests 202 202 9 1,534 1,544 1,747 4,425 4,038 387 (92) (92) (40) 963 922 829 4,683 4,100 583 – 11 – (3) Consolidated statement of changes in equity Share capital Capital surplus Treasury shares Total Retained earnings WILL GROUP, INC. (6089) (Millions of yen)Total equity attributable to owners of parent Non-controlling interests Total Balance as of April 1, 2020 2,033 (1,399) (89) (1,789) 6,478 5,233 1,890 7,123 Profit Other comprehensive income Comprehensive income Dividends of surplus Purchase of treasury shares Disposal of treasury shares Other Profit Other comprehensive income Comprehensive income Dividends of surplus Purchase of treasury shares Disposal of treasury shares Share-based payment transactions 56 Increase (decrease) by business combination Transfer from other components of equity to retained earnings 120 (506) (506) (500) (1,006) (228) 228 Total transactions with owners 56 (386) (189) (228) (282) (1,031) (490) (1,521) Balance as of March 31, 2021 2,089 (1,786) (279) (343) 8,559 8,240 1,786 10,027 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – (1) 108 (587) – 2,363 1,674 1,674 2,363 (511) (189) 2,363 1,674 4,038 (511) (189) – 176 – – – 3 182 – – – – – – – – – – – – 5 – 3,286 3,286 – 813 3,286 4,100 (541) (541) – – – – – – – – – – – – 813 813 (5) – (5) – – – – – – – – – – – – – – 5 – – – – 5 314 72 387 – – – – – 9 – – – – – 568 15 583 (6) 2,678 1,747 4,425 (511) (189) – 176 – 9 3,854 829 4,683 (541) – 3 182 – (6) (587) (641) (1,228) Total transactions with owners 73 (480) (535) (942) (647) (1,590) Balance as of March 31, 2022 2,163 (2,266) (274) 464 11,310 11,398 1,723 13,121 Share-based payment transactions 73 Increase (decrease) by business combination Transfer from other components of equity to retained earnings Other – 12 – WILL GROUP, INC. (6089) (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (4) Consolidated statement of cash flows Cash flows from operating activities Profit before tax Depreciation and amortization Share-based payment expenses Decrease (increase) in trade receivables Increase (decrease) in trade payables Other Subtotal Interest and dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment, and intangible assets Purchase of securities Proceeds from sale of securities Purchase of investments accounted for using equity method Other Net cash provided by (used in) investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of lease liabilities Purchase of shares of subsidiaries not resulting in change in scope of consolidation Proceeds from sale of shares of subsidiaries not resulting in change in scope of consolidation Dividends paid to non-controlling interests Dividends paid Proceeds from government grants Other Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period – 13 – 3,788 2,229 85 1,488 72 (1,312) 6,351 7 (86) (1,956) 4,316 (589) (46) 374 (350) 179 (433) 1,890 270 (3,080) (1,302) (798) – (362) (511) 1,273 (25) 274 1,511 5,944 7,455 (2,646) 5,293 2,084 65 (2,494) 580 (4) 5,525 9 (79) (1,104) 4,350 (741) (63) 22 – 475 (306) 1,000 1,165 (2,965) (1,310) (1,969) 1,360 (281) (540) 361 222 432 1,517 7,455 8,973 (2,959) WILL GROUP, INC. (6089) (5) Notes to the consolidated financial statements Notes on premise of going concern Not applicable. Segment information, etc. (1) Overview of reportable segments The Group determines reportable segments based on the operating segments that are components of the Group for which discrete financial information is available and regularly reviewed by the chief operating decision maker to make decisions about the allocation of management resources and assess the results of operations. The Group’s reportable segments are comprised of the following two segments. The details of each reportable segment are as follows: Reportable segments Business activities Domestic WORK Business Engaged primarily in temporary staffing, permanent placement and business process outsourcing services in Japan specifically for categories such as sales, call center, factory and care support facility, and HR support services centered on permanent employee placements for startups developed by for Startups, Inc. Overseas WORK Business Engaged primarily in temporary staffing and permanent placement in the ASEAN and Oceania regions. In addition to the above, human resources service in the HR Tech field, livelihood support services for foreign workers, and operations of apartment building for IT engineers and creative personnel (Tech Residence) are included in the “Others” segment. – 14 – WILL GROUP, INC. (6089) (Millions of yen) Amount recorded in the consolidated financial statements – (60) (60) 386 187 118,249 – 118,249 4,030 2,229 1,393 (2) Information of the reportable segments The figures for profit for reportable segments are given on an operating profit basis. The information of each reportable segment are as follows: Fiscal year ended March 31, 2021 Reportable segments Domestic WORK Business Overseas WORK Business Total Others Adjustments (Notes 2 to 4) Revenue External revenue Intersegment revenue (Note 1) Total Segment profit Other items Depreciation and amortization Capital expenditures 80,050 53 80,103 4,763 1,139 295 36,920 – 36,920 1,942 616 901 116,970 53 117,023 6,705 1,755 1,197 1,278 7 1,285 87 7 (413) (2,262) Segment assets 23,919 18,543 42,462 2,771 1,526 46,760 Intersegment revenue is based on general market price. (Note 1) (Note 2) Adjustments to segment profit of negative ¥2,262 million include intersegment eliminations of negative ¥11 million and corporate expenses not allocated to each business segment of negative ¥2,250 million. Corporate expenses mainly consist of general and administrative expenses that are not attributable to operating segments. (Note 3) Adjustments to segment assets of ¥1,526 million mainly consist of corporate assets that are not attributable to operating segments and are owned by the Company. (Note 4) Adjustments to depreciation and amortization of ¥386 million mainly represent depreciation of corporate assets not attributable to each operating segment. – 15 – WILL GROUP, INC. (6089) (Millions of yen) Amount recorded in the consolidated financial statements – (67) (67) 240 146 131,080 – 131,080 5,472 2,084 3,784 Fiscal year ended March 31, 2022 Reportable segments Domestic WORK Business Overseas WORK Business Total Others Adjustments (Notes 2 to 4) Revenue External revenue Intersegment revenue (Note 1) Total Segment profit Other items Depreciation and amortization Capital expenditures 80,726 58 80,784 4,448 1,089 2,020 48,746 – 48,746 3,348 667 1,568 129,473 58 129,531 7,796 1,756 3,589 1,607 8 1,615 87 48 (342) (1,981) Segment assets 26,241 22,391 48,633 2,449 1,267 52,350 (Note 1) (Note 2) Adjustments to segment profit of negative ¥1,981 million include intersegment eliminations of negative ¥1 Intersegment revenue is based on general market price. million and corporate expenses not allocated to each business segment of negative ¥1,980 million. Corporate expenses mainly consist of general and administrative expenses that are not attributable to operating segments. (Note 3) Adjustments to segment assets of ¥1,267 million mainly consist of corporate assets that are not attributable to operating segments and are owned by the Company. (Note 4) Adjustments to depreciation and amortization of ¥240 million mainly represent depreciation of corporate assets not attributable to each operating segment. (3) Matters pertaining to changes in reportable segments In terms of the accounting method for reportable business segments, we had previously adopted a method based on Japanese GAAP to which certain adjustments were made. After one of its regular reviews of segment information, the Group decided to align the accounting method with the accounting policies of the Group from the first quarter of the fiscal year ended March 31, 2022. Following this change, reportable segment information for the previous fiscal year has been restated. – 16 – (3) Information by region (i) External revenue Total Japan Australia Asia Japan Australia Asia WILL GROUP, INC. (6089) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) 81,294 30,405 6,549 118,249 10,976 5,378 3,510 19,865 82,333 38,186 10,560 131,080 12,211 6,394 3,395 22,001 Note: Classifications of revenue are based on countries where customers are located. However, countries that are not individually material are grouped into a geographical region. (ii) Non-current assets (excluding financial assets and deferred tax assets) As of March 31, 2021 As of March 31, 2022 (Millions of yen) Total (4) Information about major customers This information is omitted because no customer accounted for 10% or more of the Group’s consolidated revenue for a single classification of external revenue. – 17 – WILL GROUP, INC. (6089) Per share information The basis of calculation of basic earnings per share and diluted earnings per share attributable to ordinary shareholders is as follows: Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) Basis of calculation of basic earnings per share Profit attributable to owners of parent Profit not attributable to ordinary shareholders of parent Profit used for calculation of the basic earnings per share Weighted average number of ordinary shares (Thousands of shares) Basic earnings per share (Yen) Basis of calculation of diluted earnings per share Profit used for calculation of the basic earnings per share Adjustments of profit Profit used for calculation of the diluted earnings per share Weighted average number of ordinary shares (Thousands of shares) Increase in number of ordinary shares by share acquisition rights (Thousands of shares) Weighted average number of ordinary shares after dilution (Thousands of shares) Diluted earnings per share (Yen) Summary of potential shares not included in the calculation of diluted earnings per share as they have no dilutive effect 2,363 – 2,363 22,226 106.35 2,363 – 2,363 22,226 375 22,602 104.59 3,286 – 3,286 22,351 147.03 3,286 – 3,286 22,351 349 22,701 144.76 Share acquisition rights issued by resolution of the Board of Directors in July 2017: 494 units (Ordinary shares: 49,400 shares) Share acquisition rights issued by resolution of the Board of Directors in February 2018: 4,850 units (Ordinary shares: 485,000 shares) Note: The Company’s own shares that remain in the executive stock compensation trust recorded as treasury shares in shareholders’ equity are included in the treasury shares that are deducted from the average number of shares outstanding during the period when calculating earnings per share. The average number of treasury shares during period deducted in calculating the basic earnings per share for the previous fiscal year was 98,953, and for the current fiscal year was 281,368. Significant subsequent event Not applicable. – 18 –