Management Plan

Based on our corporate philosophy, and in formulating our medium-term business plan “COPRO Group Build the Future 2027” from FYE2023 to the final year of FYE2027, we have set the purpose of our Group as having the best working style and the best workers.
During this medium-term business plan period, in line with the direction indicated by our purpose, the focal point will be the career advancement of each engineer, and the building of an "engineer support platform" equipped with a wide range of services and mechanisms to support this. We will strive for sustainable growth and an improvement in our corporate value over the medium to long term by systematically promoting various measures and system design to revitalize the organization with business innovation via DX, expanding the mechanical design and SES business, and the strengthening of our organizational capacity.

We aim to be a platform company that develops personnel. Under this aim, we are looking to achieve sustainable growth and to improve medium- to long-term corporate value. To that end, we believe it is important to produce economic value that exceeds capital costs in a stable manner over the medium- to long-term in relation to return on capital. We do this by ensuring a good balance between strategic investment for growth and financial soundness.

We carefully select where to invest with a WACC (Weighted Average Cost of Capital) of 8% to 9% as a hurdle rate. Regarding finincing, we will carefully consider the cost of capital, taking into account the efficiency of capital, and financial soundness based on the balance between shareholders' equity and liabilities.

Since our founding in 2006, we have specialized in dispatching temporary staff technicians in the construction business area, and have grown by immediately dispatching experienced technical employees to work sites. Currently, we are working to grow our business results by steadily increasing the number of temporary staff technical employees and the companies they are dispatched to by focusing on hiring, training and supporting not only experienced people, but also inexperienced people.
In the future, with the aim of achieving our medium- to long-term goals, and assuming the growth of the construction technician dispatching business, which is our core business, we have grown the mechanical design development and SES business, which started in 2021, as one of the business foundations of the Group.

As the core of the medium-term management strategy in the medium-term business plan "COPRO Group Build the Future 2027" (from FYE2023 to FYE2027), the Group, which dispatches the temporary staff, is promoting the building of a platform that actively supports engineers and technicians in forming their career paths. We are building a business model not only for people who are experienced in the industry, but also for new graduates and inexperienced people who can gain long-term experience with peace of mind and with an eye on their futures as engineers.

While investing in growth to further expand our market share in the construction and plant technician introduction and dispatching business, which is the backbone of our group, in the area of human resource services specializing in high value-added engineers, we will promote investment in businesses with high market growth potential in order to foster our second main business and revenue source.

We will improve the quality of sites and the working environment, and win the trust of client companies and engineers & technicians, through the following measures. More dispatching in sets of expert human resources and new graduates, or mid-career professionals and inexperienced people together. Through the improvement of matching accuracy by building a database with the requirements for projects and the skills and experiences of the engineers & technicians. Also, by visualizing the situation of both client companies and engineers & technicians, and strengthening follow-up through more communication.

In the first half of the medium-term business plan, we will promote entry into promising new areas where demand for carbon-neutral-related equipment and apparatus are expected, and we will promote deep development of existing customers in priority areas (transportation equipment, agriculture and medical care). In the second half of the plan, we will utilize expert human resources to develop projects for new customers in priority areas (top class manufacturers). In addition to promoting dispatching in sets and working to increase the number of assignments, we aim to raise the level of business quality and build relationships of trust with client companies through a team leader system.

In the first half of the medium-term business plan, we will expand the number of both freelance and dispatched temporary staff, and will aim to increase the number of assignments by handling large-scale projects through dispatching in sets. In the second half of the plan, we will work to develop customers and projects by expanding human resources through alliances with educational institutions and expanding our base network in areas where demand is expected.

In partnership with educational institutions in Southeast Asia, we aim to provide basic education to highly-skilled human resources who are willing to work in Japan and to build a scheme to introduce and dispatch to Japanese companies that are suffering from a shortage of human resources in the areas of construction, mechanical design, and IT. In the future, we will consider dispatching highly-skilled human resources with experience in Japan to Japanese companies overseas. As a business unit overseas, in April 2021 we established COPRO VIETNAM CO., LTD. in Vietnam.

In addition to the high organic growth of our existing businesses that is centered on our core business, we will aggressively promote M&A in order to achieve intermittent growth, aiming to achieve ahead of schedule the performance targets set forth in the medium-term business plan.
In the area of human resource services specializing in engineers with large growth potential and high added value, we will target companies with excellent engineers and companies with the resources necessary to build an engineer support platform. We will set a weighted average cost of capital (WACC) of 8% to 9% as a hurdle rate, and will only consider M&A investments that exceed that rate.
In addition, as investment aimed at strengthening our business foundation and improving efficiency, in the period from FYE2023 to FYE2024, for business innovation via such things as DX, we expect the annual investment amount to be ¥150 million to ¥200 million.

Our Group places importance on medium-term growth in sales, operating profit and Non-GAAP operating profit (note). In addition, in the engineer and technician dispatching businesses of our business subsidiaries, we emphasize objective non-financial indicators such as the number of engineers and technicians, the utilization rate and the retention rate, which are components of sales, and will continue to disclose these numbers.
In addition, in the medium-term business plan “COPRO Group Build the Future 2027” (from FYE2023 to FYE2027) that was announced in May 2022, as financial targets for FYE2027, the final fiscal year of the plan, we have set ¥40 billion for sales and ¥5 billion for Non-GAAP operating profit.
Note: Non-GAAP operating profit is calculated by adding depreciation costs, goodwill amortization and stock award expenses back to operating profit.