NISSO CORPORATION【Main Q&A at the Financial Results Briefing for the First Six Months of FY 3/2020(for Institutional Investors and Analysts)】
Held on November 11, 2019
The following content is not a record of the contents of all of the questions andanswers. In addition, some revisions and corrections have been made to make thecontent easier to understand.
Q1: Including considerations for "work style reform", how much will thenumber of skilled staff increase until the end of March next year?
A1: NISSO has no new plans to increase the number of skilled staff during thecurrent fiscal year, since our original target for FY 3/2022 as described in ourmedium-term management plan is set for 8,000 skilled staff. However, although
it is without doubt that we will increase the number of skilled staff in such atrend in the future, in light of "work style reform", the most important thingthat we would like to concentrate our efforts on is to increase the number ofskilled staff while maintaining a balance between the development conditionsof these workers, orders from clients, and the educational structure. Since 80%of these skilled staff are appointees chosen, or promoted from "regular" staff,
it is crucial to train and educate them in a parallel manner to enhance their skills
in order to enable them to raise their treatment (salary).
Q2: The full-year outlook for Other Businesses is expected to be in the black,or to have a positive surplus, but to what extent is it to be expected?
A2: At Sweetpea Higashi Totsuka, in order to increase the number of residents fromthe second quarter onwards, since labor costs and other expenses of workplacestaff have been incurred in advance, firstly, we are aiming for full-year
profitability in the current fiscal year.
Q3: In the automobiles-related industry, although orders have been
extremely strong, will there be similar effects in the second half of the
fiscal year? In addition, although the situation of electronic components
industry seems to be very uncertain, how much recovery will be visible
in the third quarter, for example? Moreover, even if the situation hasbottomed out, will it still be difficult for it to be brought to the same levelas the previous year? Please inform us about the current situation.
A3: With regards to the automobiles-related industry, there are clients who havealready provided NISSO with orders, as well as manufacturers who are still
uncertain about future trends. When considering only the clients who havealready decided on their orders to us, they are expected to maintain the same
momentum as before. However, it is believed that trends will become evenstronger if we can receive orders from companies that have not provided us
with orders at present.
With regards to the electronic components industry, there are companies thatare recovering, and others who still do not see the timing of recovery. Although
it is extremely unlikely to think that the electronic components industry as awhole will decline in the future, it is difficult to provide a concrete explanation
at this time. However, in NISSO's plan for the second half of the fiscal year, weexpect the electronic components industry to grow, based on the number oforders we have already received.
Q4: Although it has been said that unit-costs will increase in response to"work style reform" next year, why exactly will they increase?
A4: In line with "Equal Pay for Equal Work" under the Acts Related to Work Style
Reform, the basis of the idea is that in cases where non-regular employees whoare directly employed by manufacturers perform basically the same duties asregular employees, they should be treated (paid) in the same way, or even incases where they perform different duties, a balance should be kept. In thecase of dispatching, there are two methods of response. One method is toprovide fair and balanced treatment (salary) as provided for at clients, or tostrike a balance with said clients, and the other method is to establish a labormanagement agreement within a human resources company like NISSO. As atrend, major dispatching companies will choose the labor-managementagreement method. Therefore, since we have to balance the treatment between
our (regular) employees and contract employees, we are in the process ofreviewing their salaries and allowances, and negotiating unit-costs with ourclients. Please understand that unit-costs will increase as a result of this.
Q5: Looking forward to the spread of 5G, how much will demand increase
with the expansion of clients due to their launching of new factories in2020 and other new business developments?

A5: Honestly speaking, it is not clear at the moment how much growth there will
be from the year 2020 onwards when 5G is set to begin. At the present time,
while NISSO has already received planned orders at the same level as before
from semiconductor manufacturers within our Account Company, there areseveral clients who have not provided us with definitive contents of orders.
Although we have some assumptions, we will refrain from responding
specifically as to how much demand will increase at this time.