6089.T

• Company Overview and Core Strengths
  • Will Group operates human resource services (primarily staffing and recruitment) centered in Japan, Singapore, and Australia, and emphasizes sustained growth and stability. Over 30 years since its founding in 1997, it has maintained growth through multiple major economic shocks including the Lehman Shock, Great East Japan Earthquake, and COVID-19 pandemic.
  • Ranked 8th in total revenue (2024 basis) and 6th in revenue growth rate (2013-2024) in Japan's highly competitive staffing industry, despite being a relatively late entrant. All of its specialized occupational segments hold top 10 market share in Japan.
  • Its core differentiated offering is

• Management targets an operating profit margin exceeding 4% in the long term, by growing gross profit rather than only cutting selling, general and administrative expenses to create sustainable profit growth.
• The company maintains the full year fiscal 2026 (ending March 2026) dividend forecast at 44 yen per share, unchanged from the previous fiscal year actual result, with a total payout ratio forecast of 50.8%.
• Steady demand growth is expected for permanent staff dispatching, driven by inherent advantages for both job seekers (employment stability, mobility, career progression) and client companies (ability to adjust workforce to project-based demand amid persistent engineer labor shortages).
• The company expects solid, stable demand for construction technician staffing to continue in the medium term, supported by ongoing growth in construction investment and structural labor shortages from an aging technician workforce.
• The company expects the increasing proportion of high-margin permanent staff dispatching and foreign employment support to continue driving overall profit margin improvement.

Geographic segments: Japan accounts for approximately 60% of total revenue, and overseas business (Singapore and Australia) accounts for approximately 40%. Occupational segments: Factory outsourcing accounts for 13.3% of revenue; Will Group maintains a diversified, non-concentrated occupational revenue structure. Gross profit composition: As of the cumulative first half of the fiscal year ending March 2026, permanent staff dispatching and foreign employment support together account for approximately 50% of total gross profit, up from a much lower share. Overall gross margin increased from 18.5% in the fiscal year ending March 2023 to 20.8% in the cumulative first half of the fiscal year ending March 2026, a 2.3 percentage point increase over two and a half years.

• The company identifies two key current strategic challenges: 1) It has achieved strong growth in the construction segment, but needs to build a second large core growth pillar, particularly in the IT and mechanical/electrical engineer segments to further diversify and accelerate growth. 2) To accelerate further overseas expansion, the company needs to strengthen the pool of talent capable of leading post-merger integration (PMI), as acquiring targets alone is not sufficient to drive growth without capable personnel to integrate and scale the acquired businesses.
• While the company operates primarily in essential, recession-resistant sectors (food manufacturing, nursing care, childcare, public infrastructure construction), general economic downturns could still reduce client companies' hiring demand, particularly in cyclical sectors that the company has limited exposure to.
• There is execution risk associated with achieving the planned growth of the new permanent staff dispatching and foreign employment support business model, as well as risk associated with successfully integrating future M&A targets that the company pursues to build out new growth segments.

Q: The operating profit margin was very high post-COVID, what factors drove this, and is returning to 4% operating profit margin possible?

A: The main driver was the post-COVID rebound in overseas markets in Singapore and Australia. COVID-19 restrictions shut down the jobs market there in 2020-2021, but when restrictions lifted in 2022 both employer hiring and job seeker movement surged in a rebound boom. While many competitors cut career consultant headcount during the shutdown, Will Group retained all staff, which allowed it to capture far more of this rebound demand and lift profit significantly in 2022-2023. Management is targeting exceeding 4% operating profit margin long-term by growing gross profit to build sustainable profit, rather than just cutting costs, and is confident it will exceed this level.

Q: What is the biggest advantage of hybrid dispatching compared to general dispatching, and can competitors copy this model?

A: The biggest advantages are higher staff retention, improved team performance that enables moving up to higher-value contracting work, and faster access to new client orders that helps expand market share. While competitors can try to copy this model by placing resident managers at client sites, the work is very demanding, as managers are squeezed between staff requests and client issues, and most competitors struggle to execute it well. Will Group's success comes from internal know-how: it identifies suitable staff from existing ranks for these roles, all management from branch managers up to executives have hands-on experience doing this work themselves, and the organization prioritizes supporting resident managers, creating a system that is hard to replicate.

Q: Can you explain your successful M&A track record, especially for domestic M&A?

A: For international M&A, Will Group uses an earn-out structure with incremental share acquisition over 1-3 years, which gives both sides time to understand each other's culture and align on strategy. It targets companies in higher GDP/population growth markets than Japan, targets companies with aligned management values and growth-oriented founders, which gives it a high success rate. For domestic M&A, the most successful example is the construction segment: Will Group leads the PMI integration process over the first two years to build mutual understanding, actively engages with the acquired company's leadership to identify strengths and challenges, then boldly adjusts strategy (for example, shifting a construction staffing firm that focused only on experienced hires to also actively recruit and train inexperienced new entrants), and provides both capital and internal talent support by moving experienced Will Group staff into the acquired business, which drives successful growth.

Q: Is the permanent staff dispatching market expected to grow going forward?

A: Yes, it will continue to grow. This employment model offers unique benefits: for job seekers, it offers both flexibility (for example, allowing women to remain employed if they need to relocate due to a spouse's job change) and career progression (unlike casual fixed-term dispatching, permanent dispatching focuses on skilled roles like engineering that build skills and increase earnings over time), which is a combination only permanent dispatching can offer. For clients, persistent labor shortages in engineering mean demand will always outpace supply, and project-based industries like construction and IT want the flexibility of staffing as a variable cost rather than hiring permanent employees directly, so demand will continue to grow.

Q: What are your competitive strengths in talent recruitment and retention amid the labor shortage, and how does female employment perform at your company?

A: The key is quickly iterating PDCA to adapt to changing market conditions. Will Group has two core competitive advantages: first, it achieves a 50% female recruitment rate for male-dominated roles like IT engineers and construction management technicians, and female retention is actually slightly higher than male retention. These roles require strong attention to detail and multitasking skills that many women excel at, so women are very successful in these roles at Will Group. Second, Will Group has long prioritized new graduate recruitment for corporate staff, and that experienced recruitment team now leads new graduate hiring for engineer roles, allowing it to consistently hire strong talent.

Q: How does your business perform in a recession, do you have stability in downturns?

A: Will Group operates primarily in essential, recession-resistant sectors that cannot be shut down even in a downturn: it holds large market share in food manufacturing, nursing care, childcare, and public infrastructure construction (such as water infrastructure, disaster prevention levee repairs) that is required regardless of economic conditions, so these sectors are much less affected by recession. Will Group is growing share in these sectors continuously, creating a very stable base for the business.

Q: What are your top three current challenges and how are you addressing them?

A: The top two key challenges are: first, while construction is growing strongly, we need to build a second core growth pillar, specifically in IT and mechanical/electrical engineering segments, where we believe we can achieve significant new growth. We expect M&A will be a key part of entering and scaling this new pillar, as organic entry would take too long. Second, for overseas expansion, we need to develop more talent that can lead post-merger integration, because growing an acquired company is the key to success, not just buying it, and without enough qualified PMI talent growth cannot accelerate regardless of capital. We are addressing this by prioritizing talent development and creating growth opportunities for internal staff to build these capabilities.

Q: Is there any possibility of exiting or scaling back existing business areas?

A: Yes, there are some areas where we question whether we are still the best owner, and we continuously evaluate these areas. We will not rush a decision, as it depends on opportunity and timing, and we will only exit to a buyer that is a better owner for the business than we are. In some cases we will reallocate talent within the company rather than sell the whole business, if the people can grow more in another business area, we will realign internal assets to support growth, and we will consider exit when it makes sense for all stakeholders.

Q: Which countries do you plan to expand into next?

A: For the foreseeable future we will focus on the ASEAN region, which meets our criteria of higher population and GDP growth than Japan, and can leverage synergies with our existing overseas business. We will also evaluate potential expansion into the US and Europe in the longer term.

Q: Why is Australia and Singapore the core of your current overseas business, will you expand to other countries?

A: We selected these markets because they meet our criteria of higher growth than Japan, had available high-quality M&A targets, and had strong cultural and operational alignment with Will Group, which is why they became our core overseas markets. Going forward we will focus on ASEAN for new expansion, and evaluate the US and Europe longer term.

Q: Will the current strong demand for construction staffing continue?

A: Yes, construction is the main driver of current domestic growth, and we expect solid steady demand to continue. Construction investment is growing, and there is a structural shortage of construction technicians due to aging, so demand will remain strong. We will continue to focus on this segment and expand our capacity to capture more demand.

Q: What makes Will Group different from other staffing companies?

A: Our three core strengths are a focus on driving client results, investment in talent development, and high staff retention. Unlike many staffing firms that only supply workers, we go further to drive outcome and results for clients, we train and upskill inexperienced workers to turn them into productive staff via OJT and our training programs including hybrid dispatching, and our high retention allows us to deliver stable consistent service to clients, which differentiates us from competitors.

Q: How much profit contribution will your new strategies (permanent dispatching and foreign employment support) deliver once they are fully scaled?

A: We have not given specific quantitative guidance yet, but both of these business models are high-margin within our portfolio, so as their share of our business increases they will continue to drive overall profit margin improvement for the whole company.

Q: What is your core growth focus now and in the medium term, what segments do you want to grow further?

A: The construction technician segment, our current focus under the mid-term plan, will continue to lead growth for the foreseeable future. Going forward, we expect to drive additional growth from permanent dispatching in the IT engineer segment. We will continue to focus on scaling permanent staff dispatching, foreign employment support, and recruitment, all high-margin business models, to strengthen our profit base and transition to a higher-margin business structure.