Q&A: Estimated number of enrolled sta and recruitment
costs at the end of the current ﬁscal year

Questioner: ou sthat the recruitment process has been very di cult, but how many people doyou expect to be enrolled at the end of the current ﬁscal year? Has the recruitment cost per capita
gone up?
Yaid

Shimizu: ur t r t u

r of enrolled sta at the end of the quarter is a little over 17,000. We plan
to increase the number by a little more than 1,000 per year.
Oa genmbe

recruitment environment is mainly driven by Automotive Industry. However, as more devices areadded to the menu in the future, we believe that more than 17,000 sta
will come into view.

Thes for recruitment costs, we expected more in the future. In order to achieve our goal of increasing theAumber of sta by 1,000 in the future, we plan to invest a reasonable amount of money in September,October, and November, so we think that the recruitment cost per capita will also increase a little.

nQ&A: Seasonality of operating proﬁt in 1Q

Questioner:

the proﬁt level, operating proﬁt for the ﬁrst quarter amounted to 500 million
yen compared to the full-year forecast of 3.6 billion yen. For example, there may be recruitment
costs, new sta
who are not yet in operation, and other factors, but are these seasonal factors
stronger than usual?

Shimizu:rRega dingperating proﬁt was initially expected to be about 400 million yen on a consolidated basis,but as a result, it was 100 million yen higher than expected. Although there are various costs involved,
one of the factors was that the recruiting costs were not so high.
Oﬁrst quarter is the least proﬁtable of the four quarters. Given the short monthly operating hours
on the calendar, I believe that being able to generate 500 million yen in this situation is by no means abad situation.

Theurrently, since our focus is centered on the Automotive Industry, things will change when the othertwo industries return to normal in the second half, and both are able to drive sales to generate proﬁts.
Normally, if the proﬁt is 1 in the ﬁrst half, it will double in the second half, but this year we areproceeding with a simulation where the proﬁt will likely be 2.5 times higher in the second half that in
the ﬁrst half, so we believe that we are never behind.
CQ&A: Operational status of Manufacturing・Production Human
Resources Services
Questioner:

the operational status of human resources, you explained that operating rates,
particularly for Manufacturing Production Human Resources Services, are recovering relatively
smoothly. Although net sales per capita have increased due to the rising unit-costs, the average
operating hours per capita were low, about 180 hours per month. Please tell us speciﬁcally what thesituation is.

Shimizu:rRega ding・

spite the shorter operating hours, some automobiles manufactures have returned to about
90% of normal overtime hours as semiconductor procurement has become relatively steady.
Deowever, other automobiles manufactures have been unable to recover production, and as a result,when looking at the overall situation, overtime is about 70% to 80% of normal levels.

Ht on, in the electronics and semiconductor memory ﬁelds, overtime is roughly half what it used
to be. Decreasing overtime hours per capita has had a signiﬁcantly negative impact on both sales andproﬁts.
In addi iQuestioner: ou sthat the number of operating personnel is relatively steady, but what is thesituation that only overtime is decreasing?
YShimizu:

aid

the number of enrolled sta is equal to the number of operating personnel due toregular employment, it means that 100% of our sta are operational.
Sincet ough production in both the automobiles-related and electronics-related industries is proceedingas planned, we have yet to reach the point where overtime is fully utilized in our production activities.

Al hpeciﬁcally, it is related to inventory adjustments in the semiconductor and electronics-relatedindustries, and in the automobiles-related industry, it is due to the running out of key devices,
including power semiconductors.
SQ&A: Operational status of new graduate engineers
Questioner: ou st t

that this year there were 128 new graduate engineers, and that about 70 ofthem would be in operation from July onwards. So, as of the end of July, after about two months oftraining, I think it means that about half of them have been decided, but is it safe to assume that things
are progressing smoothly?
Ya edShimizu: t sy understanding that things are going well. Since July, 70 of them, mainly forequipment maintenance and equipment engineers, have been assigned. As a new graduate, there areindividual di erences. We constantly have access to our clients to monitor the new graduates’ level ofacquisition of basic skills, and then assign them to the clients sequentially.
Iimrom 128 new graduates receiving training without being assigned, more than half, 70 to be exact,
have been assigned, so It is not at all a slow pace, but rather a normal one.

FQ&A: Factors behind the signiﬁcant quarter-on-quarterdecrease in operating proﬁt

Questioner:t do you see as the reason, other than seasonality, for the decrease in operating
proﬁt from 869 million yen in the fourth quarter of last year to 500 million yen, while net sales were atabout the same level? Please provide detailed disclosure with regard to costs, such as whether thecost of acquiring new human resources was higher than usual or whether other expenses wereincurred.
Wha

Shimizu: wou

to explain NISSO’s non-consolidated expenses, which accounts for nearly 90%
of our consolidated sales. For us, the ﬁrst quarter is a time for investment. First of all, regarding costs,costs will expand due to the entry of new graduates and their education period in the ﬁrst quarter. As
a result, the gross proﬁt decreases by about 100 million.
I

ld liket on, SG&A expenses increased by about 100 million yen due in part to the increase in salesand administrative personnel, the improvement in their treatment (salaries), as well as procurement
costs related to the hiring of new graduates. As a result, operating proﬁt is reduced by about 200

In addi i

on yen. However, this has happened in previous years, and it does not mean that any major
expenses or other costs were incurred, but that these expenses are within the scope of our plans.

milli

Q&A: Net sales by industry

Questioner:

terms of net sales by industry, please tell us about any reclassiﬁcations made at theend of the ﬁrst quarter.

Shimizu:

Inv ot made any reclassiﬁcations. Although at the simulation level, to give you an ideaof where we will land at the end of the year, we predict that both the Electronics Industry andSemiconductor Industry segments will see an increase in sales throughout the year.
We ha e nt is needed for this is in our industry strategy. It will be necessary to ﬁrmly conduct business withcompanies other than our traditional Account Companies and actually assign personnel to them. We
predict that both the semiconductor and passive components area will continue to trend upward.

Wha