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Announcement of Revision of the Consolidated Full-year Financial Forecasts

Feb. 14, 2018
Recruit Holdings Co.,Ltd.

Recruit Holdings Co., Ltd. (the "Company") hereby announces the following revisions to its consolidated financial forecasts for the fiscal year ending March 31, 2018 ("Fiscal Year 2017" or "FY2017") from the previous forecasts announced on May 12, 2017, reflecting the recent business performance.

1.Revised Consolidated Full-Year Forecasts for Fiscal Year 2017

 
Revenue Operating income Profit attributable to
owners of the parent
Earnings per
share- Basic
(in millions of yen) (in millions of yen)(in millions of yen) (yen)
Previous forecasts (a) 2,084,000 185,500 122,000 73.03
Revised forecasts (b) 2,166,000 191,500 149,000 89.19
Variance (b-a) 82,000 6,000 27,000 -
% change (b/a) 3.9% 3.2% 22.1% -
FY2016 Results (c) 1,941,922 193,513 136,654 81.33
% change (b/c) 11.5% -1.0% 9.0% -
EBITDA Profit available
for dividends
Adjusted EPS
(in millions of yen) (in millions of yen) (yen)
Previous forecasts (a) 251,000 124,000 82.01
Revised forecasts (b) 258,000 129,500 85.30
Variance (b-a) 7,000 5,500 3.29
% change (b/a) 2.8% 4.4% 4.0%
FY2016 Results (c) 232,205 122,131 80.06
% change (b/c) 11.1% 6.0% 6.5%

2.Reason for the Revision

The Company's consolidated earnings forecasts for FY2017 have been revised upward based on the Q3 results announced today. The Company expects that consolidated revenue, operating income and EBITDA for FY2017 will exceed the previous forecast, reflecting favorable results especially in the HR Technology and Staffing segments. The Company also expects that profit attributable to owners of the parent will exceed the previous forecast due to lower income tax expense mainly resulting from tax reforms in the United States and European countries, in addition to the favorable results for the nine-month period of FY2017. Foreign exchange assumptions applied are as follows: USD= 110 yen, EUR=129 yen, and AUD=86 yen.

The year-end dividend forecast for FY2017 remains unchanged as of today. The Company will review the dividend forecast when the full-year consolidated earnings results are finalized, based on its dividend policy to set its payout ratio at approximately 30% of profit available for dividends.

Notes:
The Company has adopted the International Financial Reporting Standards ("IFRS") from the first quarter of the fiscal year ending March 31, 2018. The figures for the year ended March 31, 2017 (FY2016) in this document are finalized figures based on IFRS. In addition, the Company implemented a three-for-one stock split of its common stock effective on July 1, 2017. The number of shares issued (common stock) was calculated assuming that the stock split was implemented at the beginning of the previous fiscal year.

Definition of Key Management Indicators

  • EBITDA = operating income + depreciation and amortization ± other operating income/expenses
  • Profit available for dividends = profit attributable to owners of the parent ± non-recurring income/losses, etc.
  • Adjusted EPS = adjusted profit4/ (number of shares issued at the end of the period - number of treasury shares at the end of the period)
  • Adjusted profit = profit attributable to owners of the parent ± adjustment items5 (excluding non-controlling interests) ±tax reconciliation related to certain adjustment items
  • Adjustment items = amortization of intangible assets by acquisitions ± non-recurring income/losses

The above consolidated financial forecasts are forward-looking statements which incorporate the Company's assumptions and outlook for the future and estimates based on the Company's plans as of the date of this release. These forward-looking statements are based on information available to and certain assumptions by the Company as of the date of this release, and there can be no assurance that the relevant forecasts will be achieved. Please note that significant differences between the forecasts and actual results may arise from various factors in the future, including due to changes in economic conditions, changes in clients' needs and users' preferences, competition, changes in the legal and regulatory environment, fluctuations in foreign exchange rates, and other reasons.