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Management Policy

(1) Basic Management Policy of the Group

The Group's management philosophy sets out its mission to focus on responding to the needs of society by creating new value, thereby contributing to a brighter and more fulfilling world in which all individuals can live life to the fullest. The Group also defines "Creation of new value," "Contributions to society" and "Respect for all individuals" as Recruit way, a value the Group holds in high esteem.

Under this management philosophy, the Group operates its businesses aiming to create a number of matching services with high market share, connecting enterprise clients and individual users through its platforms to provide swift and convenient access to information for individual users to take new opportunities and improve their life experiences.

The Group focuses on maximizing shareholder value and enterprise value through its business operations.

(2) Target Management KPIs

The Group carries out various growth investments, including mergers and acquisitions, flexibly and aggressively to achieve profitable growth over the long-term while focusing on increasing shareholder value. Therefore, the Group has set a management target―a high single-digit compound annual growth rate (CAGR) for adjusted EPS over the three years from the year ended March 31, 2017 to the year ending March 31, 2019.

In addition, in seeking to achieve its management target, the Group will emphasize and set a single-year growth rate of EBITDA for each fiscal year, taking into account an appropriate balance of investments and earnings growth.

(3) Management Strategy of the Group

The Group believes swift decision making is essential to maximize shareholder value and enterprise value by actively responding to the rapidly transforming Internet business industry and identifying business opportunities globally. As such, the Group has expanded its businesses through each of its three Strategic Business Units ("SBU"s), HR Technology, Media & Solutions and Staffing, since FY2016. Furthermore, the Group carried out the Group Reorganization, establishing respective SBU Headquarters for each SBU, and began operating under a new management structure effective on April 1, 2018 in order to further evolve this structure. The new organizational structure enables each SBU Headquarters to strengthen its management capability to execute its independent strategy in a self-sustaining manner, and the Company to focus on and strengthen its holding company functions and highly efficient group management structure including governance and monitoring of the Group, to increase its enterprise value.

The HR Technology segment aims to further expand its presence globally through the existing business of Indeed, an online job search engine in the United States and other countries. The Company estimates the market size of global online job advertisement, which is the primary business of Indeed, to be in the range of 11 billion to 13 billion US dollars, representing a significant growth opportunity over the mid-term. The segment aims to drive future growth by investing in R&D or through M&A to create new and innovative ways to drive efficiencies in recruiting and hiring processes.

The Media & Solutions segment believes it is important to provide small-to-mid sized enterprise clients with new services to improve their operational efficiency, and to expand targeted industries to reach more enterprise clients for sustainable revenue growth, in addition to operating the existing businesses. By accelerating the initiatives mentioned above while maintaining a high EBITDA margin, the segment aims to expand its client base, diversify its business portfolio, and achieve sustainable growth mitigating the impact of external environmental changes.

In the Staffing segment, Japan operations aim for stable growth against a backdrop of a favorable market environment in Japan. Overseas operations focus on improving EBITDA margin continuously, by introducing Unit Management System which has been implemented in Japan operations to overseas subsidiaries.