PERSOL HOLDINGS CO., LTD.
Held on Thursday, July 4, 2024
Script of IR DAY: DAY2 BPO SBU Business Description【Executive Officer BPO SBU Lead Ichimura】

Hello, everyone.
My name is Ichimura. I am in charge of BPO SBU.
I will let you understand the BPO SBU today.
Beginning with Chapter 0, we start with an overview of our SBU, including its
background.

BPO SBU started as a new business segment(SBU) splitting off from Staffing SBU
mostlyin April 2023 — last year. About one year has passed. The BPO market is

set to grow significantly. Meanwhile, the competitive environment has changed, forinstance as technologies have evolved. One factor in Japan is the decline in theworking population.
This has produced a considerable increase in demand for BPO.
We intend to adapt to these changes in the competitive environment.
An internal factor is that, since our launch we have been combining scatteredelements of each company of us into the SBU. We are strengthening them within
the SBU and in the Group.
We aim to be a pillar of Group's overall profit growth.
We will accelerate growth by integrating strategies. To improve productivity, we willtransform both internally and externally, making proactive use of technologies. To
advance these measures, we will join forces as an SBU and focus our efforts onthem.

Now, I would like to provide some basic information about the BPO SBU.

Starting with the SBU's structure,
the businesses of the BPO SBU are in the middle row.
We have four business segments: the business process outsourcing or BPO
business, the customer experience business, the professional business, andother businesses providing SaaS and other products.
I will explain details of each business later.
First, the BPO business is a major pillar. It is 70% of the total SBU.
The customer experience or CX business, with a central role in transforming
communication, is around 20%.
The professional business is about 10%, and other businesses account for the rest.
The SBU has seven companies.
We are adding value to services by consolidating the Group's track record, expertise,etc.

I would like to briefly introduce our management team.
I am the representative and lead the SBU.
Let me introduce myself briefly.
I joined PERSOL TEMPSTAFF mid-career.
Initially, I was a salesperson in charge of temporary staffing.
I also worked in specialized businesses for financial companies and the financeindustry.
I was a leader there and then managed human resources for about six years.
I later moved to the BPO business and have been in this position to date.
A two-person team manages the SBU, myself and Mr. Otomo on the right.
Mr. Otomo joined PERSOL CAREER, where he gained experience in corporate
planning and other operations.
He later led IT-related operations at PERSOL TEMPSTAFF.
He was then the representative at PERSOL INNOVATION and at Sharefull.
This SBU brings together divisions from across the group to develop new projects.
In the Human Resources Division, I executed a number of PMI projects. With thisand Mr. Otomo's experience implementing, using and promoting IT, we aim to
move the BPO business forward together.

We aim to establish our mission as a new SBU and accelerate the business.
We are determined to achieve the Group Vision, "Work and Smile", and to be a
"Career Well-being" Creation Company.
Our mission is to transform operations and organizations to create better working
environments. We are guided by this mission and all of us are working hard.

Now I would like to share information about our performance.
COVID-19 had positive and negative impacts on us and our competitors.
As this graph shows, COVID-19 had a big impact on revenue in FY2022 and FY2023.
This fiscal year, there are no longer any COVID-19-related projects.
Revenue from organic businesses not affected by COVID-19 have achieved doubledigit growth in the three years since FY2022.
The OP margin was 6% in FY2022, and the SBU was established in FY2023.
At present, we are investing internally to maximize synergy.
The OP margin was and will remain weak in FY2023 and FY2024, partly reflecting
these investments in addition to COVID-19.
We see this as temporary. So we aim to return profitability and the OP margin to
their previous levels and beyond.

I will move on to the capabilities of our SBU.
PERSOL Group, which includes us, has a very strong customer base.
The BPO SBU, has 1,900 corporate customers.
More than 3,000 projects are underway.
There

are

around10,000permanent

BPO

SBU

employees,orregularemployees. Another 10,000 people or so are engaged in operations as fixed-term
employees.
So more than 20,000 people are on duty at this very moment.
We provide outsourcing services in two ways: working full-time at customers' offices
and relocating customer operations to do them externally.
A feature of the SBU is the large number of cases where our staff work full-timewith the customer on site.
In around 75% of all projects, we set up our bases at customers' offices.
Naturally, some operations are done off site.
Our outsourcing center has 24 offices nationwide and about 6,000 booths.
We provide comprehensive services to our customers in close cooperation with themat their offices and operations that we do more efficiently.

Next is a business overview.

I begin with our markets and allocations of our businesses.
The most important markets are highlighted in the darkest color.
The main ones are the non-IT BPO market, the telemarketing market focused
mainly on call centers, and the contact center solutions market.
We are also active in fields that belong to the IT-related BPO market.
In addition to the BPO and CX businesses in these markets, we also operate theProfessional business.
We believe that the business consulting and freelancer markets will also be included
in our activities.
These markets have a total size of about 7 trillion yen at present.

Service transformation through BPR and technology utilization

And we have these three business categories.
The BPO business, CX business and Professional business do not operated
independently of each other.
Customers needs are becoming increasingly diverse and sophisticated.
We aim to integrate the three businesses and create a broad range of deep,
sophisticated services.
In the BPO business, we seek to reliably increase our sophistication andimprove customers' productivity.
And CX will operate in tandem with the BPO business, in the communication field.
We seek to optimize the customer experience.
One of our features going forward is the professional business shown on the right.
At present, we proactively provide customers with services including the BPR of
their operations and support in using technologies.
The SBU overall has secured thousands of workers who can be involved in thesebusinesses.
They will also engage in the BPO and the CX businesses.
Of course, we will boost the sophistication of ongoing outsourced operations,leveraging the professional business to improve quality.
We will do this by improving the productivity and profitability of our projects andintegrating the three businesses.

Let me explain what we do in each business, one by one.
First, in the BPO business, we provide BPO services common across industries aswell as industry-specific services. Services common across industries are related tofunctions that any company has. The most widely used are corporate back-office
operations including HR management, general affairs and finance.
The number of front-office operations we do for customers is increasing considerably.
We see sharp increases in requests to consolidate or develop administrative
operations supporting sales activities. Furthermore, many people from the BPO
business are involved in new business launches, operation management and design,
DX support and similar activities. For industry-specific services, our presence is
growing in the public sector — especially local government.
We operate in the public and quasi-public field of infrastructure-related work.
Other operations include finance, IT, and telecommunications. Given our long
involvement in various industries, we see growing demand for our expertise.
In the CX business, our expertise in both contact centers and sales and marketing
will be strengths. For contact centers, our services go beyond operations using
telephones to encompass inbound and outbound operations using a range ofchannels. We can also offer customer support, specialized, high-level IT help desk
services and other services. In sales and marketing, we offer diverse services andsolutions for everything from lead acquisition to nurturing potential customers.
We are also involved in field sales and inside sales. In the Professional business, ourgreatest advantages are business consulting and technology consulting.

In business consulting, we provide support for BPR and the DX of diverse operations.
We have been responding to strong demand for services in HR. Going forward, we
will strengthen our capabilities in this area. As for technology consulting, there weremany projects related to RPA a decade ago. Today, we are receiving more requests
related to AI. Our support also benefits from our experience in the development ofdiverse digital human resources.

Acceptance of Dementia Diagnosis Grant
Program Grant Applications"Let me describe some services that we tailored to key customer needs through a
combination of our BPO, CX, and Professional businesses. This first example
involves a local government. "The operations are being carried out with a government-designated city.
Because the client is a local government, they provide various services to citizens.
We have established a structure in which nearly 100 of their operations are handled
at a single administrative work center. Around 200 of our people are working forthe client now. We support the local government's work, including tasks done byhumans and tasks that have been largely automated through DX. Another point I
want to mention is this call center part. We also handle diverse inquiries
from citizens, respond and solve their problems. This is an example of our BPO andCX teams' joint provision of services.

This next example is about our services for a major pharmaceutical company.
Here we started with a small number of people. Just a few workers.
The client praised our performance, and now about 80 staff members work for theclient.
We started

small,

but

ouroperational

knowledge

andabilityto establish

flows slashed project launch times in other departments as well. This and thequality of our services drew praise, and so our activities have extended horizontally.
Here, we combined the Professional business and the BPO business. In the overall
Group, there is also cooperation between the temporary staffing business, theStaffing SBU.
The Staffing SBU has dedicated teams for the medical business and the R&D
business. So we have expertise in these areas as well.
We will obtain information through reliable coordination and design operational
processes. This is how we provide value to customers.
Further, the DX of the process has considerably expanded our activities.
We have already received many requests for the service in this example. Its use will
likely continue to expand.

Next, I will explain the operating environment.

I will start with the market outlook.
Earlier in this presentation, I told you that we are targeting markets with a total
size of around 7 trillion yen. They include the fields we are active in, such as the
BPO, CX, and Professional fields. The conditions in these markets differ slightly.
First, the BPO business. We expect progress in labor savings using technologies. We
also believe this will affect prices somewhat. On the other hand, there is a labor
shortage. The companies that are active in the BPO market are seeing customer
expectations grow as leading providers of DX services. We expect that the market
in this area will continue to expand. The second market is the CX market. The
telemarketing and contact center segments of this market are very sensitive to theeconomy. However, many companies still have employees doing in-house callcenter operations. We expect that the market will remain flat for now as we tap into
demand generated by those companies. Then we will see the emergence of CC
solutions and related services. We will provide reliable support there. We believethat we can steadily tap into the growth of this market too. The third market is theshared services center market. Many companies and major corporate groups inparticular have subsidiaries in shared services. In fact, they appear to be enteringa period of transformation. This means that using external services is a very likely
option. We believe that we can support customers by providing new services in thisfield. The last part of this slide is about the Professional market. Here, it is extremely
difficult to recruit high-level human resources. It is very competitive. This trend islikely to continue.

Many new competitors are entering the market and it is booming. We expect it tomaintain its very strong growth.

Next, I will explain our competition.
During the pandemic, many companies from a diverse range of industries entered
the BPO field. Their characteristics are shown in the figure on the left.
There are two broad patterns. One is to move forward using the power of people.
The other is to do so using the power of technology.
Companies with the largest shares of the market began to recruit people a longtime ago. They use the power of people in their initiatives. In these circumstances,competition for human resources will clearly be very fierce. It has become extremely
difficult to acquire general operators. Demand for specialists is growing very rapidly,
partly reflecting digitalization and the difficulty of attracting talent. The competition
has really begun. Going forward, we will strengthen our tech investment focusing
on generative AI. We will of course invest steadily, and we are doing so at present.
We believe that other companies will also invest heavily in AI research. Othersignificant changes that are expected in the market are described here. Since the
COVID-19 pandemic, there has been significant progress in workstyle reforms.
Homes are the new workplaces. The style of work will also change considerably.
We have established the acceleration of M&A activities and alliances as the third
point on the right. Technologies have a significant impact, driving rapid progress inthe transformation of business. Above all, we have accelerated M&A and alliances
to consolidate and increase our market share or competitive edge. In the last coupleof years, we have been receiving more inquiries from companies proposing
cooperation and alliances for business expansion.

Like our competitors, we are taking these and other initiatives to create new value.
This is our thinking.

I will move on to explain our strengths.
First, the biggest strength of the PERSOL Group in BPO is our ability to attract people.
We believe we have outstanding capabilities in this area.
We must continue to boost this ability, beyond our competitors, to consistently
attract people who are operators, the specialists, and high-level people, who will beneeded in the future.
The strengths that we have developed to date in BPO are:the ability to develop human resources, our process design capabilities, and ourability to manage organizations and human resources.
We will continue developing these strengths decisively. Our process design
capabilities in particular will also bolster our technological strength going forward.
We will combine future and existing technologies to meet the diverse high-levelneeds of customers.
We will improve our internal productivity to increase our earning power.
We would like to strengthen these points further.

Now I would like to give an overview of our mid- to long-term strategic policy.

A major policy is that the BPO SBU will accelerate the growth of existing businesses.
We will also strengthen our technologies.
In addition, we will strengthen human resources.
We would like to keep these three points firmly in mind in our initiatives.

First, we will grow our existing businesses.
We seek to provide diverse services by organically integrating BPO and CX.
"We will firmly integrate our expertise and push forward with cross-selling toincrease synergy within the SBU. This is absolutely our first step."
Above all, we will continue to expand ongoing projects at each company. It is very
possible to acquire the next operations at client companies.
Strengthening cross-selling will lead to growth in revenue and profits.
In the Professional business, I said that acquiring talent will be extremely difficultin the future. We will continue strengthening our recruitment.

Second, we will bolster our technologies.
Of course, we will continue to use currently available products and technologies.
We will take labor saving steps, such as making effective use of professionals. We
will also use generative AI.

And finally, we will strengthen our human resources.
I mentioned that about 10,000 people work for us as fixed-term employees.
We will do everything we can to reskill and upskill these people.
This will elevate the capabilities of our people.
We also have thousands of specialists.
We will optimally allocate these human resources to projects.
This will greatly improve productivity, along with profitability and service quality.
We will accelerate these initiatives.

I have been talking about our businesses and our direction.
As I said, we aim to keep moving forward to fulfill our mission of creating betterworking environments. In doing so, we appreciate your continued support. Thankyou.

Thank you.