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 “Applying the power of outsourcing to support corporate innovation and solutions to society's challenges,” 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

The Group's basic management policy is to develop high added value businesses, and we maintain the goal of an operating profit margin of 10% or more as an indicator for this policy. Additionally, we seek continually to strengthen our corporate value and to return profits to shareholders, targeting a consolidated dividend payout ratio of 30% or more.

3. Medium-/long-term management strategy

The Group will advance a new business strategy that focuses on the next decade of growth. The operational areas on which we intend to place special emphasis are Special Needs Employment Services, Environmental Management Support Services, and Wide-area Administrative BPO Services, all of which have strong customer bases and promise high growth potential. In each of these areas, we will pursue not just organic growth by strengthening existing services, but new growth. To do so, we will expand our business domain in various ways, including developing new businesses and engaging in mergers and acquisitions. With regard to our Special Needs Employment Services, in addition to our existing farm-based services, we will develop new services that accommodate the diverse work styles tailored to the characteristics of those with special needs. For our Environmental Management Support Services, in addition to expanding our environmental consulting service offerings, we will expand our business domain to include all matters related to sustainability, including, but not limited to, ISSB disclosure and ESG assessment support services. In Wide-area Administrative BPO Services, we will leverage our local government network to develop services targeting regional revitalization, including business succession support, government mobility as a service (MaaS), and relocation and settlement support.

4. Priority business and financial topics

The Group recognizes the following four 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 84.8% 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 Recruitment and Development of High Quality Human Resources
We seek to hire human resources who are both sensitive to and capable of proactively identifying solutions to various social changes and issues. To this end, we will continue to focus not just on promoting our social businesses, which have a positive social impact, but on developing the next generation of leaders, young people in particular.

④ Promoting Diverse Human Resources
We believe creating environments in which diverse human resources can thrive and maintain keen motivation over the long term is critical to the competitiveness of a company. To this end, we are investing heavily in improving our working environments. To encourage employees to tackle new challenges, we have introduced various systems, including a Career Challenge System and a Company System. To enable employees to work with peace of mind over the long term, we have introduced a program whereby the Company matches employee contributions to a stock ownership plan (ESOP) on a one-to-one basis. We are also making various efforts to promote health management, including establishing a nurse’s office.