Note: This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

April 12, 2024

CONSOLIDATED FINANCIAL REPORT (Japanese GAAP)FY2023 (June 1, 2023 to May 31, 2024)
Nine Months Ended February 29, 2024
Listed company name:
Pasona Group Inc.
Listing stock exchange:
The Prime Market of the Tokyo Stock Exchange
Securities code number:
2168
URL:
https://www.pasonagroup.co.jp
Representative:
Yasuyuki Nambu, Group CEO and President
For further information contact: Yuko Nakase, Senior Managing Executive Officer and CFO
Tel. +81-3-6734-0200
Scheduled filing date of quarterly report: April 15, 2024
Supplemental materials prepared for quarterly financial results: Yes
Holding of quarterly financial results meeting: No(All amounts are in millions of yen rounded down unless otherwise stated)

1. CONSOLIDATED BUSINESS RESULTS(1) Consolidated Financial Results
Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.

Operating
ProfitNet Sales
Nine Months ended February 29, 2024
Nine Months ended February 28, 2023
(Note) Comprehensive income

%

%

%

%

265,558 (4.2)
277,280 2.4

4,674 (56.2)
10,664 (38.5)

4,622 (59.6)
11,445 (35.6)－(753)
3,948 (46.0)

9M FY2023: ¥1,299million ((81.4)%)
Net Profit
per Share

9M FY2022: ¥6,596 million ((44.0)%)

Diluted Net Profit
per Share
Yen

Nine Months ended February 29, 2024
Nine Months ended February 28, 2023

Profitattributable toowners of parent

Ordinary
ProfitYen(19.23)100.79－100.55(2) Consolidated Financial Position
Total Assets
Net Assets
Equity Ratio (%)
20.3
February 29, 2024
254,497
68,292
May 31, 2023
275,504
71,624
19.6(Reference) Equity
As of February 29, 2024: ¥51,544 million
As of May 31, 2023: ¥53,998 million(Note) In total assets as of May 31, 2023 and February 29, 2024, temporary “Deposits received” from customers related tocontracted projects is recorded in liabilities, and “Cash and deposits” worth it is recorded in assets. For details, please refer to“1. Qualitative Information Concerning Quarterly Consolidated Business Results (2) Overview of Consolidated Financial
Position”.

2. DIVIDENDS PER SHARE
End ofFirst Quarter
Yen

End ofSecond QuarterEnd ofThird Quarter

Yen

Yen

FiscalYear-End

Total
Yen

Yen

FY2022
35.00
35.00
－
0.00
－
FY20230.00－－
FY2023 (Forecast)
75.00
75.00
(Note) Revision to dividend forecast in the current quarter: Yes
Breakdown of year-end dividend for the fiscal year ending May 31, 2024 (forecast)Ordinary dividend: ¥15.00
Special dividend: ¥60.00(Note) Please refer to "Resolution of Special Dividend and Revision of Year-End Dividend Forecast for the Fiscal YearEnding May 31, 2024" announced today (April 12, 2024) for the revision of the dividend forecast.

― 1 ―3. FORECAST OF RESULTS FOR THE FISCAL YEAR ENDING MAY 31, 2024
Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.

Operating
IncomeNet Sales%

FY2023 Full Fiscal Year

370,000 (0.7)

Ordinary
Income%10,000(30.4)

Profit attributable to Net Income per
Shareowners of parent%

10,000(34.9)

100,000%

Yen－

2,552.55(Note) Revision to forecast of results in the current quarter: None

4. NOTES(1) Changes in important subsidiaries during the current period: None
(Changes in specified subsidiaries that caused changes in the scope of consolidation)(2) Application of the special accounting practices in the preparation of quarterly consolidated financial statements:
None(3) Changes of accounting principles, changes in accounting estimates and retrospective restatement
1) Changes of accounting principles in line with revisions to accounting and other standards: None
2) Changes of accounting principles other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Number of shares issued and outstanding (Common shares)
1) The number of shares issued and outstanding as of the period-end (including treasury shares)
February 29, 2024: 41,690,300 shares
May 31, 2023: 41,690,300 shares
2) The number of treasury shares as of the period-end
February 29, 2024: 2,507,562 shares
May 31, 2023: 2,515,520 shares
3) Average number of shares for the period (Quarterly cumulative period)
Nine months ended February 29, 2024: 39,176,546 shares
Nine months ended February 28, 2023: 39,174,588 shares(Note)The Company has introduced “Board Benefit Trust (BBT)” and “Employment Stock Ownership Plan (J-ESOP)”. The Company’s
shares in the BBT and J-ESOP, which are reported as treasury shares under Shareholders’ equity, are counted as the number oftreasury shares as of the average number of shares outstanding for the period for the purpose of not including for computing
earnings (loss) per share.

The Quarterly Financial Report is not subject to a quarterly review conducted by CPA or audit firm.
Cautionary statement and other explanatory notes
The aforementioned forecasts are based on assumptions and beliefs in light of information available to management
at the time of document preparation and accordingly include certain unconfirmed factors. As a result, readers areadvised that actual results may differ materially from forecasts for a variety of reasons. Please refer to (Attachment)"Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements" for the assumptions usedin forecasting earnings.
(Method to obtain supplemental materials for quarterly financial results)
Supplemental materials for the quarterly financial results have been posted on the Company’s website(https://www.pasonagroup.co.jp/ir/) since April 12, 2024.

― 2 ―Consolidated Financial Report
Nine Months Ended February 29, 2024

INDEX

1. Qualitative Information Concerning Quarterly Consolidated
Business Results(1) Overview of Consolidated Business Results･･･････････････

p. 4(2) Overview of Consolidated Financial Position･･･････････････

p. 10(3) Overview of Consolidated Financial Forecasts and Other･･･････････････

p. 10(1) Quarterly Consolidated Balance Sheets･･･････････････

p. 11(2) Quarterly Consolidated Statements of Income and･･･････････････

p. 13

Quarterly Consolidated Statements of Income･･･････････････

p. 13

Quarterly Consolidated Statements of Comprehensive Income･･･････････････

p. 14･･･････････････

p. 15(Notes to Going Concern Assumption)･･･････････････

p. 15(Notes on Significant Changes in the Shareholders’ Equity)･･･････････････

p. 15(Additional Information)･･･････････････

p. 15(Segment Information)･･･････････････

p. 17(Important Subsequent Events)･･･････････････

p. 18

Forward-Looking Statements
2. Quarterly Consolidated Financial Statements and Major Notes

Comprehensive Income(3) Notes to Quarterly Consolidated Financial Statements

(
8
)

(
8
(

― 3 ―

1. Qualitative Information Concerning Quarterly Consolidated Business Results(1) Overview of Consolidated Business Resultsi) Business Results for the Nine Months ended February 29, 2024
During the first nine months of the current fiscal year, the Japanese economy showed a gradual recovery,
although the pickup in personal consumption stalled. On the other hand, the need to closely monitor theeffects of global monetary tightening and the downturn in overseas economies continued.
Amid this environment, the Group's key strategies for the current fiscal year (hereinafter referred to as the"current fiscal year") are "1) Evolving into X-Tech BPO" in the BPO domain, where demand is growing;"2) Expanding support for diverse work styles and career development" in the labor market, where work
styles are diversifying; and "3) Expanding earnings from local development projects centered on Awaji
Island" in the tourism domain, where post-COVID-19 revitalization is underway. We are working to solve
various social issues through our business activities.
During the nine months ended February 29, 2024, revenue decreased from the previous fiscal year in Expert
Services and Outsourcing due to a decrease in emergency demand related to countermeasures for the
COVID-19 infection up to the previous fiscal year, while revenue increased in BPO Services due to anincrease in new project contracts. In addition, the decline in revenue from the Regional Revitalizations
solutions business was due to technical factors, as the previous third quarter included five months' results
instead of three months due to the effect of a change in the fiscal year end at some subsidiaries in the previous
fiscal year.
As a result, consolidated net sales for the nine months of the current fiscal year totaled ¥265,558 million(down 4.2% year-on-year), and gross profit amounted to ¥62,450 million (down 7.9% year-on-year), partly
due to lower gross profit margin caused by decreased special demand. SG&A expenses were ¥57,775 million(up 1.1% year-on-year) due mainly to an increase in personnel expenses in line with business growth in BPO
Services, despite the absence of double rent associated with the office relocation to "PASONA SQUARE"
in Minami Aoyama, Tokyo, which took place in the same period last year. Operating profit was ¥4,674
million (down 56.2% year-on-year), and ordinary profit was ¥4,622 million (down 59.6% year-on-year).
Net loss attributable to owners of the parent amounted to ¥753 million (net profit attributable to owners of
the parent of ¥3,948 million in the same period of the previous fiscal year.), a significant decrease from theprevious fiscal year, when extraordinary gains such as gains on sales of investment securities wererecorded.

9M FY2023 Consolidated Financial Report(June 1, 2023 – February 29, 2024)(Millions of yen)

9M FY2022

9M FY2023

YoY

Net sales

277,280

265,558(4.2)%

Operating profit

10,6644,674(56.2)%

Ordinary profit

11,445

4,622(59.6)%Net profit attributable to owners of parent or
net loss attributable to owners of the parent

3,948

(753)

－

― 4 ―

ⅱ) Business Segment Information (before elimination of intersegment transactions)*Following the reorganization of subsidiaries during the third quarter of the current fiscal year, somebusinesses that fall under "BPO Services" and "HR Consulting, Education/Training and Others" werereviewed and reclassified into new segments.
Figures for the third quarter of the previous fiscal year have been compared with the figures after thereclassification.

HR Solutions
Expert Services (Temporary staffing), BPO Services (Contracting and outsourcing), etc.
Net sales ¥222,008 million Operating profit ¥7,621 million[Expert Services] Net sales: ¥100,937 million
In this segment, the Group provides expert services (temporary staffing) for a wide range of job types andgenerations, from office work to highly specialized skilled personnel, engineers, sales and marketing
personnel, and from young people to senior citizens.
In the nine months of the current fiscal year, net sales declined to ¥100,937 million (down 9.0% from thesame period of the previous fiscal year), as the work related to the nationwide response in Japan to the
COVID-19 infection, which had handled in the previous fiscal period, was largely completed. During theperiod under review, orders from manufacturers, trading companies, and the IT field expanded from thesame period of the previous year, and we are working to further acquire orders, particularly for IT engineersand high-level administrative positions that require specialized knowledge and experience, as well as tonegotiate rate revisions.

[BPO Services] Net sales: ¥106,777 million
In this segment, the Group provides BPO services by contracting reception, sales administration, order
receipt and placement, human resources, labor, and payroll, as well as general affairs that consolidate andstreamline complicated clerical work for customers and accounting and finance services that handle expense
reimbursement according to busy schedules. Bewith, Inc., a consolidated subsidiary, provides contact centerand BPO services utilizing self-developed digital technology.
Although the number of special demand projects in the third quarter of the current fiscal year decreased
compared to the same period of the previous year, both private companies and the public sector attracted
new demand. During the nine months ended February 29, 2024, demand in the private sector expanded for
BPO services to focus on their core work and improve productivity in the areas of human resources andaccounting, as well as for services related to employee health promotion support. In addition, demand relatedto X-Tech BPO increased, including contact center operations to respond to consumer inquiries and in-houseproduction support for corporate DX human resource development, as well as the expansion of reskilling
and administrative agency business contracts from the public sector. Pasona Nihon Soumubu Co., Ltd.
(renamed Pasona Panasonic Business Service Co., Ltd. on April 1, 2024 ), which provides BPO services
specializing in the general affairs domain, also made progress in acquiring new projects.
As a result, net sales amounted to ¥106,777 million (up 1.6% year-on-year).

― 5 ―[HR Consulting, Education/Training, Others]

Net sales: ¥6,381 million

In this segment, we provide consulting and management support by professional human resources such as
freelancers and former executives of listed companies, as well as education and training services
commissioned by companies and the public sector.
In the education and training business, needs for next-generation leadership training and training for
women's activities increased.
In the advisory and consulting business, introductions of outside directors and outside corporate auditors
continued to be strong. In the recruiting business, demand for consulting services expanded in line withchanges in recruiting methods, such as direct recruiting and alumni recruiting. In the education and training
business, needs for next-generation leadership training for managers and training for women's activities
increased.
As a result, net sales amounted to ¥6,381 million (up 2.1% year-on-year).
[Global Sourcing]

Net sales ¥7,911 million Operating profit ¥114 million

In this segment, the Group provides a full line of human resource-related services overseas, including
placement and recruiting, temporary staffing and outsourcing, payroll processing, and education and training.
In Asia, demand for human resources from Japanese-affiliated companies remained firm in Taiwan, where
the semiconductor industry was robust, and in Southeast Asia, where economic recovery continued, sales
increased in each country. On the other hand, SG&A expenses increased due to the prior progress inincreasing staff through hiring and improving compensation at many locations, especially in the U.S., aswell as an increase in training and business travel.
As a result, net sales amounted to ¥7,911 million (up 8.5% year-on-year), and operating profit amounted to¥114 million (down 74.8% year-on-year), partly due to the foreign exchange effects of the weaker yen.
Net sales for the segment consisting of the above businesses amounted to ¥222,008 million (down 3.2% yearon-year). In terms of profit, during the period under review, the gross profit margin declined due to an increasein social insurance premiums, mainly in Expert Services, a decrease in the number of dispatched medical
professionals as the COVID-19 infections subsided, and the impact of fewer operating days during the third
quarter of the current fiscal year, including the year-end and New Year’s period. In addition, the increase in
SG&A expenses from the same period of the previous year, mainly due to an increase in personnel expenses inline with business growth in BPO Services, resulted in operating profit of ¥7,621 million (down 33.2% year-onyear).

Career Solutions (Placement / Outplacement)
Net sales ¥9,909 million

Operating profit ¥2,980 million

In this segment, The Group provides the Placement / Recruiting business, which supports companies' mid-career
recruiting activities and matches job seekers with job seekers, and the Outplacement business, which supports
job transfers based on companies' human resource strategies.
In the Placement / Recruiting business, although some companies are changing their hiring policies due tochanges in the business climate, stable demand continues in the high-career field, which is a strategic focus for
the Group, and large companies that had previously focused on hiring new graduates have begun to actively
pursue mid-career hiring, resulting in business expansion. During the third quarter of the consolidated fiscal year
under review, although the unit contract price increased from the same period of the previous year, the numberof contracts signed slowed down due to an increase in the number of job-transfer applicants who were consoledwith retirement and a review of our support system to realize high-quality matching within the Company.
In the outplacement business, demand continued to decline as the number of companies recruiting early and― 6 ―voluntary retirees was the smallest in the past decade. Currently, an increasing number of companies are
beginning to solicit early and voluntary retirement in light of the impact of the Chinese economy and future
earnings prospects, but the contribution to earnings is not expected until the next fiscal year or later. The "Safe
Placement Total Service," which supports employees' autonomous career development, continues to growsteadily as more companies offer career counseling and reskilling to their employees due to the growing
awareness of human capital management.
As a result, net sales amounted to ¥9,909 million (down 3.8% year-on-year), and operating profit amounted to¥2,980 million (up 0.4% year-on-year).

Outsourcing

Net sales ¥28,376 million Operating profit ¥5,813 million

In this segment, our consolidated subsidiary Benefit One Inc. provides mainly outsourced employee benefit
services to corporations, government agencies, and municipalities.
In the employee benefits business, while membership fee revenue, which accounts for the majority of sales,
increased year-on-year, transactions specific to the former JTB Benefit Inc. declined. In addition, the unit priceof membership fees was lower than expected due to the fact that newly acquired members were mainly frommajor client groups, as well as the impact of reductions in both revenues and expenses due to the revision ofsome contracts, resulting in a decrease in revenues compared to the plan. On the expense side, expenses increased
year-on-year due to investments in human resources and systems for medium- and long-term growth, but theoperating margin in the employee benefit, personal and CRM businesses improved, partly due to the effect of
duplicate cost reductions from the integration of services of the former JTB Benefit Inc.
In the healthcare business, sales in the Corona vaccination support business decreased year-on-year. Although
there were delays in acquiring new orders in the health guidance business, the implementation of projects forwhich orders had already been received progressed, resulting in year-on-year increases in both sales and income.
The health checkup business is generally progressing as planned. In the payment business, marketinginvestments such as commercials, which had been planned for the previous quarter, were made in the current
quarter to coincide with the start of "Netflix" "Pay-as-you-go" menu.
As a result, net sales amounted to ¥28,376 million (down 8.5% year-on-year) and operating profit was ¥5,813
million (down 25.8% year-on-year).

Life Solutions

Net sales ¥5,686 million Operating profit ¥90 million

This segment includes the childcare business, which operates licensed and certified childcare centers, in-housechildcare facilities, and childcare for school-age children; the nursing care business, which provides daycare
services and home-visit nursing care; and the life support business, which provides housekeeping services.
In the life support business, including housekeeping services, demand for sterilization and disinfection
services, which had been offered at hospitals and lodging facilities in the previous fiscal year, declined
significantly. Although the number of contracts for housekeeping services provided to families with children
increased steadily, SG&A expenses increased, particularly personnel expenses, as projects were dispersed
across multiple regions.
In the childcare business, the number of children received increased from the same period of the previous
fiscal year due to the opening of new licensed nursery schools and school-age clubs. On the other hand, grossprofit decreased due to the postponement of the receipt of subsidies for facility operation related to theimprovement of compensation for childcare workers, as well as an increase in cost of sales, including
personnel expenses and operating expenses, associated with the opening of new childcare facilities.
As a result, net sales amounted to ¥5,686 million (down 7.0% year-on-year) and operating profit amounted to¥90 million (down 71.1% year-on-year).

― 7 ―Regional Revitalization Solutions

Net sales ¥4,327 million Operating profit ¥(1,966) million

In this segment, the Company is engaged in regional development projects to create new industries andemployment in rural areas in cooperation and collaboration with local residents, local companies, and local
governments.
During the third quarter of the fiscal year under review, the number of operating days at each facility operatedon Awaji Island, Hyogo Prefecture, declined from the previous year due to the establishment of a maintenanceshutdown period, but we attracted customers by holding events in accordance with seasonal events anddeveloping products using seasonal ingredients, and we also enhanced our online merchandise sales website. In
addition, the online shopping site was enhanced. "Zenbo Seinei", which offers activities such as "Zen" and"Yoga" and healthy meals on a 100-meter-long wooden deck, has become a tourist attraction that attracts many
visitors, with rooms fully booked for the year-end and New Year's accommodation packages. Hyogo Prefectural
Awaji Island Park Animation Park "Nijigen-no-Mori" strengthened multilingual support and promotional
activities to further attract inbound visitors. In restaurants and other food and beverage facilities, use of group
tours has increased 1.5 times over the previous year, and business collaboration with travel agencies, etc., hasbeen strengthened.
During the nine months ended February 29, 2024, net sales and operating profit fell short of the previous year
and the initial plan due to the record-breaking heat wave during the summer season and unfavorable weekend
weather. In addition, the third quarter of the previous fiscal year included five months' results instead of threemonths due to the change in the fiscal year end of some subsidiaries in the previous fiscal year, and technicalfactors led to a larger decline in revenue.
As a result, net sales were ¥4,327 million (down 17.5% year-on-year), and operating profit was ¥(1,966) million(¥(2,119) million in the same period of the previous year), a smaller deficit due in part to curbs on TV
commercials and other SG&A expenses.

Eliminations

Net sales ¥(4,749) million Operating profit ¥(9,865) million

It includes intergroup transaction elimination and costs to maximize group synergies, incubation costs for new
businesses, and administrative costs as a holding company.
During the nine months ended February 29, 2024, personnel expenses and IT-related expenses to promote DX
increased, and some expenses related to the pavilion at the 2025 Japan International Expo (Osaka/Kansai Expo)
were incurred from the period under review. Despite the elimination of double rent associated with the officerelocation to "PASONA SQUARE" in Minami Aoyama, Tokyo, which took place in the same period of theprevious fiscal year, net sales for elimination of intergroup transactions amounted to ¥(4,749) million (¥(4,872)
million in the same period of the previous fiscal year), and operating income amounted to ¥(9,865) million(¥(9,748) million in the same period of the previous fiscal year).

― 8 ―Segment Information (Figures include intersegment sales)
Consolidated Net Sales by Segment(Millions of yen)

9M FY2022

9M FY2023

270,791

260,293(3.9)%

229,463

88,035222,008(3.2)%

Expert Services (Temporary staffing)

110,876

100,937(9.0)%BPO Services (Contracting)

105,0476,251

106,777
6,381

+1.6%
+2.1%

Eliminations and Corporate

7,288
10,30531,022
6,114
5,247(4,872)

7,911
9,909
28,376
5,686
4,327(4,749)Total

277,280

265,558+8.5%(3.8)%(8.5)%(7.0)%(17.5)%－(4.2)%

9M FY2022

9M FY2023

22.21816,415(26.1)%

11,4097,621(33.2)%

10,9537,506(31.5)%

Life Solutions

456
2,969
7,838
314

114
2,980
5,813
90

(74.8)%+0.4%(25.8)%(71.1)%

Regional Revitalization Solutions(2,119)(1,966)

Eliminations and Corporate(9,748)
10,664(9,865)4,674－－(56.2)%

HR Solutions
Expert Services (Temporary staffing),
BPO Services (Contracting), Others

HR Consulting, Education & Training, Others
Global Sourcing (Overseas)
Career Solutions (Placement / Recruiting, Outplacement)
Outsourcing
Life Solutions
Regional Revitalization Solutions

YoY

Consolidated Operating Profit by Segment(Millions of yen)

HR Solutions
Expert Services (Temporary staffing),
BPO Services (Contracting), Others
Expert Services (Temporary staffing)
BPO Services (Contracting)YoY

HR Consulting, Education & Training, Others
Global Sourcing (Overseas)
Career Solutions (Placement/Recruiting, Outplacement)
Outsourcing

Total*Following the reorganization of subsidiaries during the third quarter of the current fiscal year, some businesses
that fall under "BPO Services" and "HR Consulting, Education/Training and Others" were reviewed andreclassified into new segments.
Figures for the third quarter of the previous fiscal year have been compared with the figures after thereclassification.

― 9 ―(2) Overview of Consolidated Financial Position
Status of Assets, Liabilities and Net Assets
As of February 29, 2024, the amount of ¥63,311 million (¥74,869 million at the end of the previous fiscal
year) of temporary “Deposits received” from customers by the Group related to contracted projects wasrecorded in liabilities, and “Cash and deposits” worth it was recorded in assets, whose use is restricted.
AssetsTotal assets as of February 29, 2024 stood at ¥254,497 million, a decrease of ¥21,006 million or 7.6%,
compared with May 31, 2023. This was mainly attributable to a decrease of ¥32,490 million in cash anddeposits due to the above decrease in "deposits received" and payment of long-term borrowings, while notes
receivable, accounts receivable and contract assets increased by ¥4,871 million due to an increase in contract
projects, and property, plant and equipment increased by ¥5,587 million due to the Regional Revitalization
Solutions projects, etc.

Liabilities
Total liabilities as of February 29, 2024 stood at ¥186,205 million, a decrease of ¥17,675 million or 8.7%,
compared with May 31, 2023. This was mainly attributable to a decrease of ¥12,833 million in deposits
received due to the above-mentioned commissioned projects, etc., a decrease of ¥2,586 million in accountpayable due to advanced payments, and a decrease of ¥4,989 million in long-term loans payable due torepayment of loans, and a decreased by ¥2,490 million in income tax payable due to income tax payments,
etc., while short-term borrowings increased by ¥9,651 million due to fundraising.
Net Assets
Net assets as of February 29, 2024 stood at ¥68,292 million, a decrease of ¥3,331 million or 4.7%, comparedwith May 31, 2023. This was mainly attributable to a decrease of ¥2,137 million in retained earnings due to
net loss attributable to owners of the parent of ¥753 million and dividend payments of ¥1,396 million, and adecrease of ¥877 million in non-controlling interests mainly due to dividends paid by a subsidiary.
As a result, equity ratio as of February 29, 2024 was 20.3% (19.6% at the end of the previous fiscal year).
Total assets after deducting “Cash and deposits” with “Deposits received” related to contracted projects stoodat ¥191,186 million (¥200,634 million at the end of the previous fiscal year), and equity ratio 27.0% (26.9%
at the end of the previous fiscal year).

(3) Overview of Consolidated Financial Forecasts and Other Forward-Looking Statements
There is no change in the full-year consolidated earnings forecast for the fiscal year ending May 31, 2024 ,which was announced on February 8, 2024.

― 10 ―

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)

As of May 31, 2023

As of February 29, 2024

AssetsCurrent assets
Cash and deposits

123,067

90,577

Notes and accounts receivable-trade, and contract assets

52,62557,496Inventories

3,365

4,356

Other

15,337

14,751

Allowance for doubtful accounts

(121)

(136)

194,275

167,045

33,72539,313

Goodwill

7,353

6,982

Other

19,228

20,164

Total intangible assets

26,582

27,147

20,79820,884

Allowance for doubtful accounts

(7)

(8)

Total investments and other assets

20,791

20,87581,09987,336

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets
Other

Total non-current assets
Deferred assets
Total assets― 11 ―

130116

275,504

254,497(Millions of yen)

As of May 31, 2023

As of February 29, 2024

Liabilities
Current liabilities
Accounts payable-trade

7,427

4,841

Short-term borrowings

10,296

19,948

Accrued expenses

17,00916,735

Income taxes payable

3,061

571

Deposits received

78,69065,857

Provision for bonuses

4,667

2,605

Provision for bonuses for directors and other officers

26

6

Asset retirement obligations

17

110

Other

23,586

21,688

Total current liabilities

144,783

132,364

Bonds payable

3,224

2,931

Long-term borrowings

43,50538,515600

600

Non-current liabilities

Provision for share awards for directors and other officers

566

524

Retirement benefit liability

2,409

2,416

Asset retirement obligations

2,554

2,499

Other

6,236

6,353

Total non-current liabilities

59,096

53,840203,880

186,205

Share capital

5,000

5,000

Capital surplus

17,094

17,366

Retained earnings

32,94130,804

Treasury shares(2,378)(2,687)

Total shareholders' equity

52,65850,483

Valuation difference on available-for-sale securities

853

540

Foreign currency translation adjustment

348

484

Provision for share awards for employees

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income

Remeasurements of defined benefit plans
Total accumulated other comprehensive income

138

35

1,340

1,060

Share acquisition rights22

Non-controlling interests

17,622

16,745

Total net assets
Total liabilities and net assets― 12 ―

71,624

68,292

275,504

254,497

(2) Quarterly Consolidated Statements of Income(Millions of yen)

9M FY2022

9M FY2023

Net sales

277,280

265,558

Cost of sales

209,466

203,108

Gross profit

67,81362,450

Selling, general and administrative expenses

57,14857,775

Operating profit

10,664

4,674

Sponsorship money income

27
74
100

31
66
83

Subsidy income

738

109

Other

437

236

1,378

527

277
49
270
596

324
55
199
579

11,445

4,622

Gain on sale of non-current assets

213
33

15
0

Gain on sale of investment securities

731

0

Gain on sale of shares of subsidiaries and associates

17－

Total extraordinary income

995

16

Income taxes-deferred

113
113
12,327
4,735
322

171
171
4,467
3,072
(407)

Total income taxes

5,058

2,664

Profit

7,268

1,803

Profit attributable to non-controlling interests

3,320

2,556

Profit attributable to owners of parent

3.948

(753)

Non-operating income
Interest income
Share of profit of entities accounted for using equity method

Total non-operating income
Non-operating expenses
Interest expenses
Commitment fees
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on change in equity

Extraordinary losses
Loss on sale and retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes-current― 13 ―

Quarterly Consolidated Statements of Comprehensive Income(Millions of yen)

9M FY2022
Profit9M FY2023
7,268

1,803

(777)

(620)

Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

109

149

Remeasurements of defined benefit plans, net of tax

(3)

(102)

0

0

(671)

(574)

6,596

1,229

Comprehensive income attributable to owners of parent

3,647(1,032)Comprehensive income attributable to non-controlling interests

2,949

2,261

Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)― 14 ―

(3) Notes to Quarterly Consolidated Financial Statements(Notes to Going Concern Assumption)
None(Notes on Significant Changes in the Shareholders’ Equity)
None(Additional Information)(Regarding Sale of Shares of a Subsidiary)
On February 8, 2024, the Company entered into an agreement with Dai-ichi Life Holdings, Inc. (the “Tender
Offeror”), agreeing that the Company will not tender all of its shares in the Target Company in the tender
offer (the "Tender Offer") to be conducted by the Offeror for the common stock of Benefit One Inc. (the"Target Company"), a consolidated subsidiary of the Company belonging to the outsourcing segment. The
agreement (the "Agreement") stipulates, among other things, that after the Tender Offer is completed, theTarget Company will conduct a reverse stock split (the "Reverse Stock Split") in which only the Tender
Offeror and the Company will be shareholders, and that the Company will sell all of its shares in the Target
Company at that time through a share consolidation (the "Share Consolidation").
the Company executed a share tender agreement with M3, Inc. ("M3"), agreeing, among other things, totender all of the Target Shares held by the Company in the tender offer launched by M3 for the Target
Shares (“M3 Share Tender Agreement”). With the execution of the Agreement, the Company will be
accepting the offer of the Tender Offeror and the M3 Share Tender Agreement has been terminated on
February 8, 2024.
Since the Tender Offer has been completed as of March 11, 2024, based on the Agreement, the Company
may, at the Target Company's shareholders' meeting to be held in the future, propose (i) a proposal for the
Share Consolidation, (ii) a capital increase through third-party allotment to be implemented after the Share
Consolidation takes effect, with the Tender Offeror as the underwriter, and (iii) a proposal for a capitalincrease by way of third-party allotment and a capital and reserve reduction (the "Capital Increase andReduction") to be implemented after the Reverse Stock Split takes effect.
1．Outline of the Target Company(1) Name: Benefit One Inc.
(2) Location: 3-7-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo(3) Name and title of representative : Norio Shiraishi, President and Representative Director(4) Description of business: Benefits business, personal business, CRM (Customer RelationshipManagement) business, Business, Health Care Business, Purchasing
and Payment Agency Business, Payment Business(5) Capital: ¥1,527 million (as of December 31, 2023)(6) Date of establishment: March 15, 1996

― 15 ―

2．Effect on Consolidated Financial Statements
After the completion of the Transaction, the Company expects to record extraordinary gains of ¥122,300
million on a non-consolidated basis and ¥112,000 million (*) on a consolidated basis for the fiscal year
ending May 2024 from the sale of the Target Company's shares in response to the share buyback to be
conducted by the Target Company. In addition, the Company expects to record an extraordinary loss of¥1,165 million for expenses related to the sale of shares of affiliated companies, which were necessary inconnection with a series of transactions related to the sale of the Target Company's shares held by theCompany.
As a result of the series of transactions, the Target will be excluded from the scope of consolidation of theCompany as of the end of the current fiscal year and will be included in the income statement until the endof the current fiscal year, but will be excluded from the balance sheet as of the end of the current fiscal
year. Net sales and operating profit of the Target Company reported in the quarterly consolidated statements
of income for the nine months ended February 29, 2024 are net sales of ¥28,376 million and segment profitof ¥5,813 million in the "Outsourcing" reportable segment.
(*) This is a current estimate and may change in the future.

― 16 ―

(Segment Information)i) Nine months ended February 28, 2023
Information regarding net sales, segment profit (loss) by reporting segment and revenue decomposition(Millions of yen)
Reporting segments
HR Solutions

Figures in
Adjustment consolidated
statements(Note 1) of income(Note 2)

ExpertServices,
BPO
Services,
Others

CareerSolutionsOutsourcing

Expert Services

110,480

－

－

－

－

110,480－

110,480

BPO Services

103,042

－

－

－

－

103,042－

103,042

HR Consulting,
Education & Training,
Others

5,362

－

－

－

5,362

－

5,362

Global Sourcing

7,155

－

－

－

－

7,155

－

7,155

Career Solutions－

10,279－－－10,279－10,279Outsourcing－－

30,569－－30,569－30,569Life Solutions

－

－

－

5,738

－

5,738

－

5,738

Regional Revitalization
Solutions

－

－

－

－

4,651

4,651

－

4,651

Revenue from contract
with customers

226,041

10,27930,569

5,738

4,651

277,280－

277,280

Other revenue

－

－

－

－

－

－

－

－

Sales to outside
customers

226,041

10,27930,569

5,738

4,651

277,280－

277,280

Intersegment sales
and transfers

3,422

26

453

375

595

4,872

(4,872)－

Total

229,463

10,30531,022

6,114

5,247

282,152(4,872)

277,280

Operating profit (loss)

11,409

2,969

7,838

314

(2,119)20,412(9,748)

10,664

Regional
Life
Revitalization
Solutions
Solutions

Net sales

Total

－

－

Notes:
1. Adjustments of ¥(9,748) million with Operating profit (loss) includes corporate expenses of ¥(9,928) million
which primarily consist of Group management costs relating to the Company and incubation cost for our new
business and the elimination of intersegment transactions of ¥180 million.
2. Operating profit (loss) is adjusted with operating profit under consolidated statements of income.

― 17 ―

ii) Nine months ended February 29, 2024
Information regarding net sales, segment profit (loss) by reporting segment and revenue decomposition(Millions of yen)
Reporting segments
HR Solutions

Figures in
Adjustment consolidated
statements(Note 1)of income(Note 2)

ExpertServices,
BPO
Services,
Others

CareerSolutionsOutsourcing

Expert Services

100,506

－

－

－

－

100,506－

100,506

BPO Services

104,751

－

－

－

－

104,751－

104,751

HR Consulting,
Education & Training,
Others

5,524

－

－

－

5,524

－

5,524

Global Sourcing

7,713

－

－

－

－

7,713

－

7,713

Career Solutions

－

9,897

－

－

－

9,897

－

9,897

Outsourcing－－

27,978－－27,978－27,978Life Solutions

－

－

－

5,253

－

5,253

－

5,253

Regional Revitalization
Solutions

－

－

－

－

3,934

3,934

－

3,934

Revenue from contract
with customers

218,494

9,897

27,978

5,253

3,934

265,558－

265,558

Other revenue

－

－

－

－

－

－

－

－

Sales to outside
customers

218,494

9,897

27,978

5,253

3,934

265,558－

265,558

Intersegment sales
and transfers

3,513

12

397

433

393

4,749

(4,749)－222,008

9,909

28,376

5,686

4,327

270,308(4,749)265,558

7,621

2,980

5,813

90

(1,966)

14,539(9,865)

4,674

Regional
Life
Revitalization
Solutions
Solutions

Total

Net sales

Total
Operating profit (loss)－

Notes:
1. Adjustments of ¥(9,865) million with Operating profit (loss) includes corporate expenses of ¥(9,894) million
which primarily consist of Group management costs relating to the Company and incubation cost for our new
business and the elimination of intersegment transactions of ¥29 million.
2. Operating profit (loss) is adjusted with operating profit under consolidated statements of income.

Matters related to changes in reportable segments, etc.
In accordance with the reorganization of subsidiaries, in light of the organizational structure andbusiness content after the reorganization, the Company has reviewed and changed the content that
corresponds to "BPO Services" and "HR Consulting, Education/Training, and Others" in the revenue
breakdown information. In addition, the revenue breakdown information for the third quarter of theprevious fiscal year is also presented in the amount after the change.
(Important Subsequent Events)
None― 18 ―