Q&A on IR DAY: DAY 2
Questioner 1: (About Staffing SBU)
With regard to the Staffing SBU, you explained that you will continue to pursue aggressive
M&A activities in the future, but my understanding is that there have been no major
acquisitions made from 2019 onwards. What is the background to that and what is theoutlook?
Staffing SBU Lead Kimura:
It is our policy to actively pursue M&A activities in the future, but unfortunately, we haven't
found a good match yet. However, we recently acquired a company in the field of
manufacturing and light work based in Saga Prefecture at the end of May. It is a temporary
staffing firm with a leading market share in Saga Prefecture with deep roots in the local
community, and many skilled staff. At the same time, we continue to search for othercompanies willing to work with us, and if there is a company whose business portfolio andsynergy can truly be leveraged within our strategies, we hope to work with them. We havepursued these initiatives in the past, but either we didn't find companies that were a good
match, or we were ultimately unable to realize those M&As amid competition with othercompanies.
Questioner 1: (About Staffing SBU)
While you had quite many contracts underway in the early 2010s, the number declined
thereafter. Have there been changes in the M&A market for temporary staffing firms, forexample in terms of the total number or pricing of M&A pipeline projects? What is the outlook?
Staffing SBU Lead Kimura:In the past from around 2009 many of the companies we worked with were capital-type.
Recently, the number of projects done with those capital-type companies has itself run its
course, and we don't tend to be approached with similar proposals like we were in the past.
In terms of changes in the market, the number of proposals itself about future business
operations from various temporary staffing companies has remained the same, but in thepast we have ended up not being able to achieve deals because we've been unable to agree
on prices or other terms in the context of the competitive environment.
Questioner 1: (About Staffing SBU and BPO SBU)
In the utilization of AI and RPA, there are both positive aspects, and negative aspects suchas the threat of staff being supplanted. How do you view each of these?
Staffing SBU Lead Kimura:
As for the impact of AI and RPA on our business, with the number of companies seeking to
introduce AI and RPA on the increase worldwide, in terms of actual demand there are cases
where we receive orders for human resources who are able to carry out business using thesetools. We have also developed a business model where we train human resources in RPA
and dispatch them to clients. This is a business model that was not previously part of ourservices but has been increasingly recently. With regard to AI, one positive aspect is that weare actually fielding inquiries from clients looking for human resources who have a goodunderstanding of AI prompts and are able to apply them to business, and we are now at thestage of testing out training models for those skills. On the other hand, since there arecompanies testing out AI and RPA to streamline their business and use them in place ofpeople, under current circumstances there are cases where the work that was actuallypreviously performed by the temporary staff we have dispatched has been replaced with RPA,
or where due to the labor saving by AI the way in which staff work changes, or the actual
work they do changes or decreases. With those trends expected to increasingly materializein the future, we believe there will probably be both positive and negative impacts in terms of
how we catch up and how we combine those aspects in our training.
BPO SBU Lead Ichimura:First, regarding the degree of impact of business automation and the commonly discussed
notion of it eliminating business itself, we need to assess the situation calmly and thoroughly.
On the other hand, we are making active use of AI and RPA in various areas, and based on
our actual experience or intuition, we believe it is quite hard to conceive of a situation wherebusiness operations would be fully automized or require no people at all.
Whether in the BPO market or CX market, the impact of those parts that have been replaced
is something that cannot be avoided to some degree across the entire market, but on theother hand in terms of a positive direction, there is no denying that the productivity of various
projects will increase by making use of these things. As a result, since productivity per projectincreasing also means that our earning capabilities will increase, in terms of positive aspects,
I think the biggest point is that our productivity will improve. We are fielding various inquiries
from customers, particularly regarding how to use generative AI, robots, and RPA. We believe
we are positioned to become a key player in implementing these tools. We handle many
operations, and we are continuing to move forward by incorporating various demonstration
tests as part of our efforts. I believe we can develop well thought-out best practices, providing

them to the market, and as a result working with customers to improve their productivity.
While there are both opportunities and threats, we naturally want to take on the market byfirmly grasping the opportunities.
Questioner 1: (About APAC SBU)
You explained how the overall placement market in the APAC region would grow, but could
you go into a little more detail? You made comments about the working population, the ratioof people switching jobs and rising wages, and while there are social changes and slightdifferences due to country or region, please speak in a little more detail about what underlies
your view that the overall staffing market in the APAC region will grow.
APAC SBU Lead Yamazaki:
The markets in the APAC vary a lot by country, but I'd like to answer your question as to how
we think the placement business market will grow when we take an overarching view of APAC.
Regarding APAC, while Australia is a different story, in most of the countries in which we
operate the population is steadily growing. Furthermore, the average age of people in thesecountries is extremely young, with a macro situation where the working population isincreasing at a higher rate than the population overall. Under those conditions there havebeen notable increases in wages, and particularly for Southeast Asia, countries including
Vietnam, Indonesia, and India, based on my experience I believe we are seeing annual wage
increases of around 10%. Particularly the number of white-collar workers is steadily
increasing. My view is that the market will grow as wages rise by another 10%. Regarding
the number of times people switch job under those conditions, I believe it will likely increase,particularly in the so-called ASEAN development areas. I believe the number of job changes
is still on the increase in China, and given that the working population will increase, wages
will rise and in turn the number of jobs changes still has room for growth, our view is that theplacement business market will increase.
However unfortunately, as you are aware, the fees are lower than in Japan. In Japan we areable to charge 35% of the annual salary as a fee, but in most of Asia this is around 20%.
However since we don't believe those fees will decrease, our basic calculation is that since
the working population, wages and then the number of job changes will all rise, under thoseconditions our revenue will also increase.
Questioner 1: (About APAC SBU)
In the APAC region, growth in China appears to be strong. Can you comment on theconditions focusing on China?

APAC SBU Lead Yamazaki:
For China, market growth has slowed in the aftermath of the COVID-19 pandemic. I believe
this is because everyone is uneasy about changing jobs while economic conditions are notvery good. However, starting this year we expect to see a strong market recovery. China
experienced severe lockdowns during the pandemic and economic conditions have not beenthat good since then, and under those circumstances it is likely that many workers have beenreluctant to switch jobs but are now starting to consider it.
My view is that from 2024 onwards, perhaps until 2030, growth will basically return to prepandemic levels, and while the population itself may not increase, I believe the number ofwhite-collar workers is generally on the rise. For China we also anticipate significant wage
increases and as I just mentioned we further expect that the number of job changes will revert
to pre-pandemic levels. Under those conditions my view is that the Chinese market will
experience strong growth up to fiscal 2030.
Questioner 2: (About Staffing SBU)
When you talked about the Staffing strategy, you mentioned that you would focus on
manufacturing and clerical work. Am I correct to understand that by manufacturing you mean
temporary staffing in manufacturing? Please explain in detail about the area of manufacturing.
Could you also please indicate whether, to achieve those strategies, you will implement M&A
activities in addition to pursuing organic growth?
Staffing SBU Lead Kimura:In the manufacturing sector, in addition to manufacturing occupations we are working on
peripheral occupations such as factory-related work including inspection and shipping.
Rather than heavy industries like car manufacturing, we see a lot of potential in areas likehome appliances, precision machinery, semiconductors and to go slightly further afield, areas
such as pharmaceuticals and food. We believe these are areas where we can play to ourstrengths in dispatching female staff. Our Group includes a joint venture company with
Panasonic specializing in dispatching and contracting in the manufacturing sector. We workfrom that company as a starting point, including peripheral occupations related to
manufacturing, and we are aiming to expand while actively tackling organic growth and M&A
activities as well.
Questioner 2: (About Staffing SBU)
On the topic of improving profit margins, you talked about improving lifetime value (LTV) andboosting productivity by utilizing digital technologies. Given factors including current

investments, on what timeline and to what extent do you believe you can improve theoperating margin or adjusted EBITDA margin?
Staffing SBU Lead Kimura:
When we improve our profitability, increasingly refining our operations using digitaltechnologies will be a key factor. The mission-critical systems we use for matching and labor
management were developed over a dozen years ago, and to speed up and refine ouroperations once more, we think we need to refine those systems, including migrating themto the cloud. To do that, we are planning to make investments in digital technologies this year
and next year, but beyond that, I want you to understand that we are designing our businessso that when we have refined our operations and increased the speed at which we operate,
the improved convenience for users will manifest as economic effects.
Questioner 2: (About BPO SBU)
I have a question about BPO. In the outsourcing of customer operations, you naturally needto collaborate and coordinate with Staffing, but what is the current state of coordination, what
is your perception of the challenges faced in developing synergy, and in which areas arethings going well?
BPO SBU Lead Ichimura:
As you note, to approach customers and solve the issues they face, it is vitally important that
we work back-to-back with the Staffing SBU. Currently, for example, I currently fulfill a
concurrent role at PERSOL TEMPSTAFF as well. We are making sales approaches to clientson a joint basis, and I think it is important to strengthen our efforts in this area going forward.
On the other hand, I don't think we face issues that are that critical. On the customer side,
there is still a stronger preference for temporary staffing, and we still have a lot to do to fully
deliver our BPO services to customers. In this area we need to further strengthen our services
and reliably provide customers with solutions that incorporate BPO in addition to temporary
staffing. I am confident that by improving our customers' productivity overall, we can achievecustomer satisfaction, leading to improved business performance and results for us.
CFO Tokunaga:
I would like to briefly supplement that answer. We are maintaining roughly 20,000 staff for
BPO. Half of them are employees, and the other half are registered temporary staff. The
Staffing SBU has provided support in the recruitment of those registered temporary staff, andthis is one example of how Group synergy is working.

Questioner 2: (About BPO SBU)
Regarding the profitability of BPO, in your mid-term management plan targets you intended
to raise the adjusted EBITDA margin to around double of what it is now in three years' time.
What elements lead to this improved profitability, and what do you intend to do in service ofthat?
BPO SBU Lead Ichimura:
Regarding profitability, in terms of organic growth there has been a slight deterioration since
fiscal 2022.
In fiscal 2023 we newly launched as an SBU, and in both fiscal 2023 and 2024 we havepromoted business structural reforms to maximize internal synergies. Internal investment has
increased for that reason but will settle down during the current fiscal year. From fiscal 2025,
we see an early return to the organic levels seen in fiscal 2022 as the first step. Beyond that,
we want to continue with efforts to shift our revenue structure. We will continue to raise the
top line as we have done previously, while revising our cost structure to reliably enhancegross profit. As a result, we are currently planning and implementing efforts to increase
operating profit.
Questioner 2: (About APAC SBU)
Regarding APAC, you mentioned having made steady progress in relation to the current midterm management plan, but what do you see as the challenges and things you need to do
under these conditions? For example, what do you need to do within the contexts of thebusiness top line, the cost side, and in the selection and concentration of business?
APAC SBU Lead Yamazaki:
I think reliably expanding the placement business is extremely important to improve revenue
in the APAC region. As the market is steadily growing, we are not concerned about it.
However, with fees lower compared with Japan, how we efficiently run the placementbusiness will be a key factor, and I think DX in the placement business will prove crucial.
PERSOL CAREER in Japan maintains extremely digitalized placement business processes
and excellent AI matching technologies. How we migrate these assets from Japan to the
APAC region we think will be a key factor, and now a considerable number of our engineers
are working on this, but there are slight differences between Japanese and overseas markets,and it is taking a little longer than expected. I think the key factors will be how well we canspeed up DX, how we manage to roll it out effectively and whether we can maintain theconditions to fully ensure productivity improvements in 2025, the last year of the mid-termmanagement plan. We have slight concerns about them.
Questioner 2: (About APAC SBU)
In the APAC region, you mentioned raising profit margins to 7-8% in the long term, but will
you be able to reach your target profit margin solely by improving the mix through an
expansion of highly profitable businesses such as the placement business or facility
management business, or will you require cost-side adjustments, selection, andconcentration beyond the period of the current mid-term management plan?
APAC SBU Lead Yamazaki:
I think the key to reaching a profit margin of 7% depends on how far we can grow theplacement business. Now, our placement business contributes 60 million USD to gross profit.
When this becomes 200 million or 300 million, it will directly contribute to operating profit andbecome a very important driver boosting EBITDA margin. To achieve that, I think DX in theplacement business will be vitally important. And regarding the business portfolio, we havecompleted the sale of the healthcare segment, and we have made active investments
regarding the FM business. I believe this has made our portfolio more optimal. In that context,
how well we grow the placement business and FM are key considerations, and I think how
far we can master DX in the placement business well ultimately be the key in determining
whether we reach an EBITDA margin of 7% or 8%.
Questioner 3: (About Staffing SBU)
What is the situation with increasing the base wages offered to temporary staff?
Staffing SBU Lead Kimura:
In general, we see certain percentages for wage increases for full-time employees andlooking at today's news we have seen figures of four or five percent, but to be honest, wage
increases for the temporary staff we hire have not risen to those levels. We are maintaining
our wages at a slightly lower level now.
There is a social trend toward viewing wage increases very positively, and we honestly accept
that wage increases offered to our temporary staff are lower than the figures generally
reported. This is because our client companies tend to look at wage increases as a topic for
discussion about their own full-time employees.
While there are some clients that consider temporary employees as valuable the same astheir own full-time employees and feel a need to increase their wages accordingly, as thesestaff represent external labor, there are still many companies that view them from aprocurement and material perspective.
The reality is that some companies tend to make use of our services from a material andprocurement perspective, and for lack of a better way to put it, they seek to acquire and makeuse of labor as cheaply as possible. Working from within that context, while we make efforts
to increase wages and negotiate with clients, there is also a pressure to reduce wages. As aresult, overall, any wage increases tend to fall below those afforded to full-time employees.
Questioner 3: (About Staffing SBU)
Does that mean there are prospects for increasing wages or raising unit prices in a year orso?
Staffing SBU Lead Kimura:In terms of wage increases for our staff, we have a situation where we negotiate across-theboard wage increases each spring like full-time employees. In addition, our negotiations
revolve around three- or six-month contract periods and the associated evaluations. This
involves negotiating over billing amounts and in turn improving the compensation for our staff.
Another consideration is the need to continuously adapt wage increases in a way that reflects
market prices for newly emerging job types. We are continually iterating on these three
aspects, and that makes it difficult to make promises about how things will turn out thefollowing year. But it is important to understand that under our business structure, from April
to the following March, unit prices have actually been increasing month after month.
Questioner 3: (About Staffing SBU)
Are there any examples of a positive cycle where pursuing employee well-being in terms ofcompensation has led to the full-time employees of your client companies emulating thosepositive aspects of your staff?
Staffing SBU Lead Kimura:
We have 120,000 staff working for us, and also directly employ some 6,000 employeesinternally. Initiatives that explore how to enhance engagement in that sense are often closely
associated with efforts underway in client organizations to improve engagement and reduce
employee turnover rates. For that reason, we speak with clients about the essence of theefforts we are pursuing internally and try to develop those efforts into services to produce a
positive cycle.
For several years we have been pursuing efforts to instill our corporate philosophy, and insome cases, customers have even asked us to share insight into the methods we employ.

For example, internally we have established an internal university and developed
mechanisms for employees to teach and learn from one another, and some clients haveexpressed interest in implementing those systems for themselves. We want to increasingly
accelerate the cycle where we can engage in mutual learning with corporate clients andprovide customers with information. To put it more bluntly, we want to create services thatwill monetize these exchanges and continue to pursue them going forward. We are now
working to create a situation where employees are happy, perceive value, and take pride in
our business.
Questioner 3: (About APAC SBU)
Regarding APAC, there was the case of Programmed GO. There is an impression that Asia
is ahead of Japan in terms of smartphones and technology shift. What examples are there
where Japan can learn from Asia, or amazing things occurring and taking root in Asia which
are worth noting?
APAC SBU Lead Yamazaki:
On the technology front, particularly with regard to the placement business, compared with
APAC markets I think progress with DX adoption in the Japanese placement business isoutstanding. Particularly in the case of Japan, operations that integrate the placementbusiness with job advertisements are a practice that is unique to only PERSOL and Recruit,
but now companies emulating this model in Asia have emerged. Their business models are
not as refined as doda, and they are still behind doda in terms of technology.
Incidentally, PERSOL has invested in Glints, one of the companies pursuing that strategy,
and I also serve as one of its board members. In terms of their progress on the technology
front, they still lag behind doda. That is why as I mentioned earlier, regarding the placementbusiness I think the focus is on what APAC can learn from Japan.
However, regarding temporary staffing, Programmed GO is a service that we developed inhouse through our subsidiary Programmed Maintenance Services in Australia. This is asolution that can be used entirely via a mobile phone and allows people to find temporary
staffing jobs, sign contracts and even manage their shifts. It also provides salary calculations,salary statements and even mechanisms to accept salary payments. Customers are alsoable to make use of the dashboard to track how much temporary staff have worked, how the
work is progressing as well as billing amounts at any time. This works through an application,
and while I think there are similar implementations in Japan, I think this implementation is far
superior.
For now, we have already finished rolling out the solution from APAC and Australia toSingapore and Malaysia, and we plan to launch it in Thailand and Vietnam this year. I think
this is on par with the technologies being implemented in the temporary staffing market in
Japan, and we want to coordinate with the Staffing SBU to share information while identifying
the positive aspects to this solution and improve the solutions we provide for temporary
staffing.
Questioner 3: (About APAC SBU)
I'd like to ask an additional question about the Programmed GO app. By rolling out
technologies initially developed in Australia to Asia, was there anything difficult orcomparatively simple in terms of R&D or releases?
APAC SBU Lead Yamazaki:
Programmed Maintenance Services ("Programmed") acquired the company that developed
this solution over a period from 2014 to 2015, and later PERSOL acquired Programmed in2017. The solution was acquired by Programmed ahead of our acquisition and was ultimately
launched after roughly five years of subsequent development. In terms of the challenging
aspects, Programmed had to closely examine its temporary staffing processes in order toautomate them, and also needed to look closely within processes to determine what
elements should be automated. I have heard that the design of the app itself was also very
challenging.
I have also heard that it was very difficult to build the matching technologies and algorithms
enabling users to look for work using this app. In this area, since things are now mostly
complete, I think we need to change our algorithms to meet the needs of each country, but I
think we can immediately launch the matching algorithm simply by making changes toparameters. Developing the algorithm was tough.
And I've also heard that the design of this app was always difficult. In terms of thedevelopment structure, we secured a team of roughly 20 engineers in Australia to develop
the app.
Questioner 3: (About APAC SBU)
I think that goodwill is a big for facility management, but how do you see the impairment riskin APAC in the going forward? Additionally, it appears that impairments were due toacquisitions, but have these acquisitions (M&A activities) run their course in Asia?
APAC SBU Lead Yamazaki:First of all, regarding impairment losses, our current goodwill has imposed the most in facilitymanagement. Facility management generates the most earnings and carries the highest
amount of goodwill. In contrast, we incurred impairment losses in another business - Property
Services.
When we acquired it in 2017, and this might not be the best way to put it, we did so for quitea high price, but the business was impacted by the COVID-19 pandemic and profitability
temporarily decreased. Since we found it hard to justify the acquisition amount and goodwill
as assets, we recorded an impairment loss for Property Services. As a result of theimpairment, at this stage we are completely on track with progress regarding facility
management, so we expect almost no further impairments.
Additionally, as we have recorded a temporary impairment for blue collar temporary staffing
by the Australia-based Programmed, at this stage we are making steady progress in thisbusiness and there is virtually no impairment risk.
I think you are safe to assume that for the time being the risks associated with this matter
have been almost eliminated.
Next, regarding future M&A activities, in the current mid-term management plan we havedeclared our goal of enhancing profitability without conducting any major acquisitions, andthat is how we intend to proceed.
Our priority is to reach an ROIC of 10%, and once we have done that, we will take anotherlook at M&A prospects and our investment strategies for APAC.
If we were to make investments under the next mid-term management plan, as you saw fromthe market earlier, I think it would probably be China. I think there is potential for investing inplacement businesses and temporary staffing in China. Having said that, over the course of
the current mid-term management plan we will not be discussing M&A activities so for now
there are no changes on that front.
Questioner 4: (About APAC SBU)
Why have you now brought up the topic of introducing doda's matching technologies in the
APAC region?
Why were you unable to introduce it until now, and what challenges do you face with its
adoption going forward?
APAC SBU Lead Yamazaki:
As for why now, we acquired Programmed in 2017 and established PERSOL KELLY before
that in 2016. After that until around 2020, we were busy with post-merger integration (PMI).
Under PMI, we spend three- or four-years standardizing systems that were previously
different in each country, including systems for the placement business and temporarystaffing and the KPIs to monitor them. We also had to standardize the commissions for
consultants, which are extremely important in Asian placement businesses.
Then when we were about to incorporate doda's technologies and utilize DX particularly inthe placement business COVID-19 emerged, and we found it difficult to make progress withDX due to the restrictions on traveling to these sites under the pandemic.
After the pandemic ended and PMI was complete, DX became important for improving
efficiency, and as noted in our current mid-term management plan, we are currently working
on this together with the doda team.
In terms of future concerns, unlike doda we do not maintain job portals or run advertising forjob vacancies. doda strengths lie in its advertising for job vacancies and its placementbusiness. This allows us to acquire a wide range of data from candidates and related
customers through job advertisements. For example, since we can ascertain what line ofwork a candidate is in and how often they view our site, we can make proposals that appeal
to those candidates. However, since we don't run job advertisements in Asia, we are currently
quite concerned about how close we will be able to get to doda in terms of job matching
accuracy.
That is why we recognize job advertisements as important and are considering theimplementation of a pseudo doda model in several countries where we would run job
advertisements for free instead of charging for them and combine that with the placementbusiness. Rather than a concern, we view this as a major challenge, and we recognize theneed to seriously consider job advertisements.
Questioner 5: (About BPO SBU)
What is the average length of contracting periods? What is the retention rate at the time ofcontract renewal? Please provide some more insight into the business in terms of these
metrics. In addition, to the extent possible please tell us about your main clients andindustries.
BPO SBU Lead Ichimura:Contractual periods vary widely. There is a certain number of very short-term contracts forlimited periods, but if you exclude those time-limited contracts, a rough average forcontractual periods would be right around one year.
In our business, there are contracts whose renewals are limited and terminate at the end,
but for other contracts we see a pattern of around 90% renewal.
Regarding the contractual terms, there are various patterns depending on the customer, suchas the private or public sectors, and particularly in the public sector contractual terms have

become quite long, for example three-year or five-year contracts. Looking down the road withthe private sector, we have built various long-term relationships and hope to leverage them
to work on a number of initiatives to promote DX including improvements to profitability. As
part of that we want to secure more long-term contracts in addition to short-term ones.
We are not able to share the names of specific clients, but a very large portion of our clientsare local governments mainly in Japan's designated large cities, so to start with theoverwhelming majority of our clientele is local governments in the public sector. In the private
sector, clients tend to be in the finance and telecommunications industries and recently inthe electric power and infrastructure industries.
In the electric power industry and similar sectors, the contracts have gradually gotten bigger
and the deals have become more involved. We hope to expand in the future while firmly
maintaining those business dealings.
Questioner 5: (About APAC SBU)
Are there differences in the job portal business between Japan and overseas?
APAC SBU Lead Yamazaki:
Basically, there are not major differences between key models. The model of listing
advertisements for job vacancies and charging for them is the same in Japan and overseas.
The differences lie in the fees. If you compare the per-ad placement percentages between
Japan and Asia, it is between five and ten times higher in Japan.
And in the case of Japan, recruitment ads tend not to be available to permanent placementcompanies and temporary staffing agencies. The ads that can be used tend to be exclusive
to temporary staffing agencies. But in Asia, an Australian company known as Seek operates
the largest platforms in Asia - Jobstreet and Jobsdb. This company generates probably 7080% of its profits from placement businesses, so in that sense the customer bases aredifferent, and I believe that up to now, permanent placement companies have not needed tohave their own job recruitment platforms. In Japan, generally speaking we prevent staffing
companies from using job advertisements. Overseas, however, staffing companies can use
them. As a result, these staffing companies can make use of employment advertisements
without having to maintain their own ad platforms to gather job listings. This is key difference
between Asia and Japan.
Questioner 6: (About BPO SBU)
Around how many staff do you have in each business - the CX business, BPO business andconsulting business?

BPO SBU Lead Ichimura:
Earlier I explained that in terms of the businesses in the SBU, the BPO business accounts
for 70%, the CX business for 20%, and the Professional business the remaining 10%. The
percentages of staff are largely consistent with that breakdown. The exception would be theProfessional business, where 5% of the SBU's staff contribute to around 10% of net sales.
The composition of sales and composition of staff appear slightly different. However, in theProfessional business the billing units (net sales) per staff member are much higher than in
the other businesses, which is why they account for a lower percentage of total staff.
Questioner 6: (About BPO SBU)
Are all staff employees? If that is the case what is their utilization rate?
BPO SBU Lead Ichimura:As I mentioned in the presentation the number of staff totals around 20,000. Half of thesestaff work on fixed-term employment operations, and the other half work under permanentcontracts. As for the utilization rate, this is almost 100% for the staff working under fixedterm employment, and the figure is around 95% for full-time employees - those working
under permanent contracts.
However, the utilization rate varies depending on the time of year. Characteristically in thefirst half of the fiscal year we welcome several hundred new staff including new graduate
recruits, after which we provide training and improve their skills before they are assigned,
so the utilization rate tends to be lower in the first half of each fiscal year. This is made up
for in the second half of the year when they are assigned to projects. Overall, the utilization
rate is currently 95%.
Questioner 6: (About BPO SBU)
Specifically what companies do you regard as your competition? And what are your specificstrengths and weaknesses compared with them? Additionally, how do you intend to
overcome those weaknesses in the future?
BPO SBU Lead Ichimura:
I would like to avoid naming specific competitors in this setting, but the competitive landscapeis like one of warring states, with players that have traditionally performed call center
operations, players who have entered the market with a range of capabilities in the consulting
field, and staffing-oriented players like us.

Our unique strengths compared with other companies are that we have roughly 6,000
dedicated staff, including in the Professional business and other businesses, and that wehave dedicated staff for BPO numbering in the thousands overall. In the future I think there
will be competition to secure human resources who can operate a business itself while
introducing and using tools and making operational improvements.
Additionally in terms of our sales style, we take advantage of PERSOL's customer base togain access to customer needs in the field and start doing business with a client using a small
number of people. We then use that as a foothold to expand laterally. This is how we havebeen able to grow at a rate that surpasses current market growth, and I believe it represents
a significant advantage over our competitors.
However, since fiscal 2023 we have transitioned to the new SBU structure and we are
currently in the process of organizing this system. We need to firmly establish this structure
and proceed to the next step as early as possible, and we recognize that increasing thesense of speed is a challenge.
CFO Tokunaga:
I would like to sincerely thank you for joining us over this long period on July 2 and today. As
we have explained, our Group comprises five SBUs and an R&D division. In addition tofurther enhancing the profitability of each business, we want to produce even greater synergy
between them.
We are also committed to pursuing opportunities such as this IR conference in greater depth
both in quantitative and qualitative terms, and we very much hope you will join us again.
Thank you for today.