[QA Included] Charm Care Corporation: Increased Revenue and Profit in Q2
Efficiencies in the Long-Term Care Business and other measurescontribute to improved operating profit

Charm Care Corporation
6062, Tokyo Stock Exchange Prime, Service Industry

We will transcribe and share the contents of the Q2 FY2024 earnings presentation for Charm
Care Corporation announced on March 1, 2024.
Speaker:Mr.Takahiko Shimomura, Representative Director, Chairman and President,
HP: https://www.charmcc.jp (Japanese)

1Q2 FY2024 Consolidated Performance Summary

Mr.Takahiko Shimomura (hereinafter, Shimomura): Hello everyone. I am Shimomura, theRepresentative Director, Chairman, and President. Thank you very much for joining us today
at our Q2 FY2024 earnings presentation despite your busy schedules. Please note that today's
materials cover a wide range of content, and therefore, we will have to omit some details.
Firstly, the summary of our consolidated performance for Q2. Thanks to everyone, our LongTerm Care Business has been progressing smoothly, especially this quarter, with strong
admissions to our newly established facilities and "Like" facilities.
In the Long-Term Care Business, expenses related to COVID-19 have decreased. Until theprevious period, subsidies related to COVID-19 were non-operating income, which reduced
operating profit. However, this period has recovered without those impacts.
I will explain later, but by changing various business structures, we have also improved
operating profit and ordinary profit. The real estate business and other segments are also
progressing well.
The consolidated performance shows sales of 18.58 billion yen, up 25.2% or 3.736 billion yen
from the previous period, operating profit of 1.57 billion yen, up 67.6% or 633 million yen,ordinary profit of 1.755 billion yen, up 49% or 577 million yen, and quarterly net profit of
1.136 billion yen, up 50% or 378 million yen.
Compared to the initial forecast, sales have increased by 0.5%, operating profit by 13.8%,
ordinary profit by 18.6%, and quarterly net profit by 17.1%.
2

Q2 FY2024 Performance by Segment

Performance by reporting segment: In the Long-Term Care Business, with the reclassificationof COVID-19 from Category 2 to Category 5, admissions to newly established facilities and"Like" facilities have been particularly strong.
This period, labor shortages were anticipated, leading to efficiencies and labor savings
through IT and AI, which contributed to the better-than-expected performance mentioned
earlier. Details will be explained later.
In the real estate business, we have determined the operator and buyer for the Ota
Nakaikegami project of our Healthcare Development business, and a sale contract is scheduledby the end of this month.
The Takarazuka Kobe project was contracted at the end of last December. Other real estate
projects ensuring short-term revenue are also progressing as planned.
Other business segments are also doing very well, notably the business conducted by our
subsidiary, Good Partners. New businesses are under development, and multiple M&A cases arebeing considered.

3

Q2 FY2024 Segment Achievement Rate

It is the achievement rate of plans by reported segments. For the Long-Term Care Business,sales were 16.174 billion yen, with a progress rate of 48.8%, operating profit was 2.012
billion yen, with a progress rate of 51.6%, and ordinary profit was 2.2 billion yen, with aprogress rate of 53.6%.
In the real estate business, sales amounted to 1.752 billion yen. Since sales areconcentrated in the latter half of this term, the progress rate is still low at this point.
We are forecasting annual sales of 9.78 billion yen. The operating profit is 14 million yen,with a progress rate of 0.8%, and ordinary profit is 9 million yen, with a progress rate of
0.5%.
Sales in the other business segments were 885 million yen, attributed to Good Partners, witha progress rate of 20%, operating profit of 40 million yen, with a progress rate of 84.2%,
and ordinary profit of 41 million yen, with a progress rate of 84.9%.

4Occupancy Rate Transition of Existing Facilities

Our existing facilities have maintained a high occupancy rate, with an average rate of 95.4%
for the second quarter of the fiscal year ending June 2024, and 95.3% as of the end of
December.
For "Like" facilities, the average occupancy rate for Q2 FY2024 was 96.5%, and as of the endof December, it has risen to 99.3%. As of now, 410 rooms in facilities are fully occupied,achieving a 100% occupancy rate.

5

Progress in Real Estate Business

Regarding the progress of development projects: The Nakaikegami property is scheduled toconclude a purchase agreement by the end of March. The most crucial element, theconstruction period for building construction, is progressing smoothly, and I am confident
that we will be able to sell by the end of June without fail.
The Kohama Takarazuka property is also progressing ahead of schedule, and we anticipate asale by the end of June.
For the next term, the construction company and operator for the Kita-Karasuyama project
have been decided. As for the Kokuryo-cho property, the operator has been determined, but
the construction company is still undecided as of now.

6

FY2024 Performance Forecast (Unchanged)

For the FY2024 Results forecast, there is no revision. We are projecting sales of 47 billion
yen, up 24.1% from the previous period, operating profit of 4.8 billion yen, up 14.4%,
ordinary profit of 5 billion yen, up 7.9%, and net profit attributable to parent company
shareholders of 3.7 billion yen, up 15.4%. For occupancy rates, "Charm Care" is expected toincrease by 1.5 points compared to the previous period, and "Like" by 3.1 points.

7

Regarding Dividends

For dividends, we plan 26 yen for this period. As shown in the slide below, it has been
increasing year by year from 6.5 yen in 2020, to 12 yen, 17 yen, and 22 yen. As we havepreviously mentioned, we are aiming for early achievement of a dividend payout ratio of 30%.

8

Growth Strategy: Development of Existing Business and Expansion ofBusiness Domains

I will explain our growth strategy. Our plan for this period is sales of 47 billion yen andordinary profit of 5 billion yen, with a mid-term goal of sales of 100 billion yen andordinary profit of 10 billion yen, aiming for early achievement of these targets.
Regarding future Long-Term Care Business, the slide mentions 'focusing mainly on the mid-tohigh price range.' In reality, the occupancy of high-priced facilities has not advanced as
initially planned.
In the existing 'Charm' series facilities, many facilities have achieved occupancy rates of
100%, 99%, and 98%, well over 95%, but for the high-priced facilities, we had initially
expected to reach full occupancy within about two years, yet it has taken over three years.
However, even though the occupancy rates of high-priced facilities are dragging down theperformance, the overall results are exceeding expectations. Therefore, I believe that if we
wait a little longer and these high-priced facilities also achieve full occupancy, the profits
will further increase.
Based on our past experience, we intend to continue opening facilities, considering a balance
between mid-priced and high-priced facilities, without being biased towards the high-end alone.
The reason why we maintain such high occupancy rates is that our company conducts
performance meetings twice a month, where we thoroughly identify issues in specificfacilities and focus on promoting admissions. We believe this contributes to the overall
improvement in occupancy rates, so we plan to continue these efforts.
9

Regarding the optimization of staff efficiency in facility operations, we are currently
working on efficiency and labor savings in operations using IT devices and "ChatGPT".
For example, "ChatGPT" has become almost usable for care plan creation. Creating care plans
used to take a lot of time, leading to overtime work for care managers, but we are speedingup the process using "ChatGPT".
However, "ChatGPT"-created plans are not always correct. When various individual information
is input into "ChatGPT", it proposes care plans based on that. There may be mistakes, so the
responsible care manager revises the care plan to fit the actual situation. Humans find it
difficult to create text from scratch, but they are good at editing others' texts, so
corrections can be made quickly if created by "ChatGPT".
Additionally, we have established "Associate Leaders", targeting personnel with highoperational capabilities under certain conditions, to optimize staff allocation. We aim tooperate under the premise of minimal staffing without reducing services, and distribute thesaved costs to the "Associate Leaders" who have supported us.

Growth Strategy: Development of Existing Business and Expansion ofBusiness Domains

As for the second pillar of our business, the real estate business, the “Healthcare
Development business” is progressing well.

10Today's Nikkei newspaper also featured a significant article, with the Ministry of Land,
Infrastructure, Transport and Tourism implementing measures to correct long working hours in
the construction industry, prohibiting orders with unreasonable schedules, and requiring
guidance and improvements for violators.
With such legal amendments, the construction industry may shrink further, extending
construction periods. As a result, materials and construction costs will rise, raisingconcerns about future orders. We are also considering countermeasures.
Currently, the projects planned from this term to the next term are progressing smoothly. As
for plans beyond that, our company has a June fiscal year-end, so we start creating budgets
for the next term and beyond in March by the management planning department. I believe theanswers on how to approach the 'Healthcare Development business' will emerge as we continue
to develop these plans.
Regarding AI-related business, unfortunately, the development of the BtoC-oriented AI
dialogue avatar robot mentioned in previous briefings has not progressed significantly. It's
not out yet, but the progress is slow.
In addition, we are advancing the commercialization of the "Abuse Prevention System(tentative name)" BtoB service listed on the slide. We are still considering the name forthis.
For long-term care providers, abuse is a significant risk. Abuse often comes to lightsuddenly. If reported by mass media such as newspapers, the company's credibility suffers
greatly. Although care is taken on-site, prevention methods are scarce, so we are developingthe "Abuse Prevention System".
Devices will arrive soon, and we will conduct repeated trials at our facilities from midMarch, aiming for productization by the end of this period.
Let me introduce our new business. Last year, on September 25, I was asked by President
Company to give a lecture on "Prescriptions for the Looming Era of Care Refugees".
The more I researched, the more I realized that there are still care refugees who cannot
receive care services despite their desire. As the population decreases and care staff
become scarcer, care refugees will undoubtedly emerge.
We are currently considering facilities that can support such people.

11

～FY2026 Consolidated Performance Targets (Progress)

Our performance forecasts for this term, the next term, and the term after next remainunchanged. However, as we are currently preparing the budget for the next term, the figures
for the upcoming fiscal years will be refined and understood in more detail.

New Establishment and Development Plans and Targets

12Plans and targets for new establishment and development: As planned, this term has seen the
successful opening of seven facilities, bringing the total number of facilities to 91 andthe number of operational rooms to 6,181. The number of facilities developed as part of thereal estate business is two. Although we have set a target of 12 facilities for the next
term, we have deliberately not changed this from the previous numbers. We expect this number
to decrease as we review further.
While we will not stop establishing new facilities, considering the current construction
situation, there may inevitably be cases where we have to postpone plans. To compensate forthese numbers, we are currently actively pursuing M&A.
We plan to develop three facilities in the real estate business next term. As for the term
after next, we are still in the stage of deciding the numbers, so we will refrain fromdisclosing them here.

Newly established facilities and development projects:

Let me talk about the plans and targets for new establishment and development. This term,
all new development facilities have started construction and are progressing as planned
without any delays.
For the next term, as shown on the slide on the right, four facilities have already started
construction, but the rest have not yet been decided. As part of our “Healthcare
Development business”, the construction company for the Kita-Karasuyama property has
already been determined, and construction has started. Meanwhile, the construction company
13

for the Kokuryo-cho property has not been decided yet, although the operating company has
been confirmed.
As mentioned earlier, securing personnel will become increasingly difficult. With rising
prices in various sectors, small-scale operators will find it extremely hard to manage theirbusinesses. Especially now, with a 1.59% increase in long-term care fees, which is truly
insignificant, as 0.98% must be allocated to personnel costs, and the remaining 0.61% will
not increase without doing anything.
There are various conditions to clear, and it is tough for small-scale operators to meetthem fully.
In that sense, as the disparity in facility performance becomes more apparent, we are seeing
a considerable number of facilities that can no longer be operated. We plan to acquire andsupplement new establishments with such facilities.

The Third Pillar of New Business (Under Preparation)

As I mentioned earlier, regarding the BtoB business, we are advancing the commercializationof the "Abuse Prevention System". Conversations between residents and staff occur in theprivacy of rooms, making it nearly impossible to know what exchanges are taking place.
And why does abuse occur? It doesn't suddenly happen out of nowhere; there are always
precursors.

14

For example, rather than staff verbally abusing, residents verbally abusing staff happensmuch more frequently. However, even if staff are repeatedly told "I hate you. Get out" orare subjected to violence, they continue to endure and provide care. But if such things
continue habitually, staff may lose patience and inadvertently act out.
By using the "Abuse Prevention System" to capture all conversations, any verbal abuse by
residents will be displayed as NG words. When this situation is observed, we can judge that
"If we leave Staff A as is, it will be serious" and prevent such situations in advance.
We believe this "Abuse Prevention System" is necessary for the long-term care industry. We
are actively working to commercialize it as soon as possible.
Regarding the "LIFE TALK ENGINE" app by WellVille mentioned on the right side of the slide,as I explained earlier, it is not progressing.
Let me explain a bit more about "care refugees". In reality, high-priced facilities cannot
assist care refugees. Therefore, low-priced facilities are necessary. In light of the social
issue of vacant houses, we are actively working to utilize vacant facilities and shutteredshopping streets to provide care at low costs. We plan to release information as thebusiness details become more concrete.

Promotion of Care DX

Regarding the promotion of Care DX, our company's most significant current initiative isthis DX transformation.
15

Specifically, our company was selected for the "Efficiency Verification of Productivity
Improvement Efforts through the Use of Technology" by the Ministry of Health, Labour andWelfare in fiscal 2021.
As described on pages 41 to 43 of the slide, we have joined the demonstration project forservice quality maintenance/improvement and productivity improvement by introducing devices
and transforming operations, such as monitoring devices, communication systems, mealdelivery robots, and reviewing excretion care, and have achieved results.
The monitoring device is called "Life Rhythm Nav". When a sensor mat is placed under the bed,
and detectors are installed on the walls and ceiling, the activities of the residents in theirrooms are displayed on the tablets held by the staff.
This has led to effects such as reducing the frequency of nighttime visits. Previously,
staff visited residents every two or three hours at night, not knowing their conditions,which caused dissatisfaction among the residents.
However, with "Life Rhythm Nav", we can confirm the residents' well-being and whether they
are already sleeping by looking at the tablet. In case of cardiac or respiratory arrest, an
alarm will sound.
This was developed by Econavista, which was recently listed. Currently, out of 5,811 rooms,
we have installed 'Life Rhythm Nav' in 2,543 rooms, and we plan to increase this to 3,306
units by the end of this term. We are planning to install a total of 5,000 units, and by
actively utilizing these, we aim to improve operational efficiency and ensure a comfortable
life for our residents.
Moreover, according to this long-term care fee revision, if certain designated conditions ofDX transformation are met, the legally established staffing standards can be changed from
3:1 to 3.3:1. Our company is currently experimenting with this type of DX to be able tostaff at 3.3:1.

16

Promotion of Care DX

Let me explain about the communication system. By wearing a communication device, everyone
can be contacted and communicate immediately. This has already been introduced in all
facilities.
The meal delivery robot has dramatically improved numbers. For example, labor time has been
reduced by 58%, and meal delivery time by 45%, also reducing the waiting time for residents'
meals by 50%.
Specifically, the staff loads four meals on the meal delivery robot and presses the switch
for Table B. Then, the meal delivery robot automatically takes the meals to Table B.
Previously, staff had to push all the meal carts.
Even now, staff push meal carts, but if Table A and Table B are adjacent, staff will deliver
to Table A and clear away. Since Table B has a meal delivery robot, they just need to clear
away there and press the button, then the robot will return to the kitchen, thus shortening
the time for tasks.

17

Promotion of Care DX

I will explain about the portable ultrasound scanners we introduced for the first time in along-term care facilities, in partnership with Fujifilm. By applying the portable ultrasoundscanners to the abdomen, it is possible to determine whether there is accumulated stool orurine.
Previously, without knowing the internal condition, if there was difficulty in bowel
movement, laxatives were administered to force bowel movement, resulting in inappropriate
defecation and urination. However, using this portable ultrasound has made it much moreconvenient, and residents are very pleased.

18

Optimization of Staffing, Improvement of Productivity

Regarding the optimization of staffing and productivity improvement: I have been considering
for over a year whether we could operate with fewer people. Although human capabilities are
considerable, maintaining the current number of people takes both time and money.
However, there was resistance to simply reducing one person, so we introduced AI and IT.
After implementing everything mentioned earlier and optimizing staff while aiming for laborsaving and efficiency, it has led to a reduction in labor costs. Moreover, this optimizationof staffing has significantly impacted our company's performance this term.
The specific effects are listed on the slide's lower left as a reference, where the added
value labor productivity per employee was 568,000 yen per month last term, and it hasreached an average of 593,000 yen per month until the second quarter of this term. In otherwords, it has increased by about 25,000 yen per person per month. Since the amount of money
received from customers does not change, this means fewer people are needed.
We call this the "Elite Few Project" within our company. By optimizing staffing, we aim toincrease productivity and redistribute the savings to our staff while also investing in IT.
This concludes the earnings presentation. Next, I would like to discuss our company's futurebusiness development and management strategy.
The Long-Term Care Business will continue to age rapidly. The number of elderly people isexpected to increase steadily until 2060, and naturally, the number of people requiringlong-term care will also increase. There are not many businesses expected to see demand for19nearly 40 years from now. Depending on the approach, I believe the Long-Term Care Businesshas significant growth potential.
On the other hand, due to the declining birthrate, the workforce is decreasing year by year,
so securing human resources becomes a major challenge. I was shocked to read a newspaper
article in 2022 stating that the number of long-term care staff decreased by 63,000. Thismeans the net difference between people leaving the long-term care profession and thoseentering it.
Previously, it was said that there would be a shortage of 320,000 care workers by 2025, but
this is probably information from more than ten years ago. Although 2024 data is not yet
available, assuming a decrease of 60,000 people each year based on 2022 and 2023, there
would be a decrease of 180,000 people over three years from 2022 to 2024. If this trend
continues, there could be a shortage of 500,000 care workers by 2025.
This is a critical situation. In such circumstances, it is important to engage in long-termcare with as few people as possible, and first, we must create such a system. There is only
one solution. So it's not that there will be no care workers, and many people still want towork in care.
In a competitive environment for securing staff, it is important to secure a superior
position by advancing IT and DX transformations and creating a comfortable working
environment, in addition to increasing salaries and improving treatment. Currently, ourcompany pays a three-month bonus annually, while many general care providers pay a two-month
bonus, so when compared with companies disclosed in the industry, our company is at the top
level. We aim to raise this to an overwhelmingly top level.
And we want to lead the industry in DX transformation. For example, regarding the
optimization of staffing, we are operating with about 20 full-time equivalent staff per
facility.
For simplicity, let's say we are operating with 21 people, and we reduce one person. In thiscase, the annual salary for staff is around 4.4 to 4.5 million yen. Adding the company's
insurance payments, we pay about 6 million yen per person. In addition, there arerecruitment costs of several hundred thousand yen per person. So, by reducing one person,
excluding recruitment costs, we save about 6 million yen.
This 6 million yen could be divided, for example, into 2 million yen for staff (10,000 yen
per person for 20 staff), 2 million yen for IT, and 2 million yen for the company. Even if
we reduce staff, if it is not returned to the staff, it will not last, so we are currently
progressing with this concept of optimal staff allocation.

20

The second issue is the surge in construction costs. It is extremely difficult to open 12
places next term. Therefore, we will actively pursue M&A.
Our company is celebrating its 20th anniversary this year. We opened our first facility in
2005, and regarding M&A, we have only done one facility about a dozen years ago and acquired
Like about two and a half years ago. We have mostly opened on our own, but we will actively
engage in M&A from now on. We will also take on new business ventures.
Finally, we aim to strive for sales of 100 billion yen and ordinary profit of 10 billion
yen.

Q&A: Progress on Staff Optimization
Questioner: Regarding operational efficiency, how much progress has been made in staff
optimization in the first half of this term? Is it implemented in all facilities, or is it
partially progressing and will expand in the second half? Also, is there room for further
efficiency improvements in the following years?
Shimomura: We have been considering the "Elite Few Project" for about a year andrealistically started this term. We have already achieved certain results.
There is still room for improvement in some facilities, but we do not intend to stop here.
For example, we plan to introduce meal delivery robots to 20 facilities by the end of thisterm. By further promoting IT, we aim to continue improving staff efficiency. We will carryout this staff efficiency improvement, anticipating a future where even if we want to hire,
there are no people available.
However, there are differences between sites with excellent staff and those without, so wewill proceed while judging the situation of the site and customers.
By optimizing staffing and increasing staff salaries, more excellent personnel will be
attracted, enabling further efficiency. I consider this an endless challenge.

21

Q&A: Plans for New Establishment and Development

Questioner: Regarding plans for new establishment and development, indeed, construction
costs have risen, so I assume that of the target of 12 facilities for the fiscal year ending
June 2025, probably 6 facilities are already planned, and the remaining 6 are related to
M&A. Will the number of M&As increase in the fiscal year ending June 2026, with a decreasein our own development? Is that the correct image?
Shimomura: The number of openings is based on numbers from about two years ago. However,problems such as work style reforms and rapid price increases in the construction market
have emerged in the past six months.
We have managed to keep the cost of this term's projects very low, and they are progressing
smoothly and without problems in terms of the schedule. Also, we are constructing two
projects for the next term, and the ones currently under construction are almost exactly as
budgeted initially.
However, recently construction costs have increased by about 30% to 40% compared to before,
and the construction period may also take about 1.5 times longer than expected. The
situation beyond the projects currently planned and underway is unpredictable. This is thesame for other operators.
Considering this situation, we will acquire and revive facilities that have become
unmanageable through M&A. The occupancy rate of "Like" has risen from 74.5% to almost 100%in about two years. This was achieved simply by doing what was supposed to be done.

22

Most failing operators tend to leave it up to the site. There are demands for admissions tolong-term care facilities , and if we work hard, we can promote admissions adequately. We
are co nfident in promoting admissions and management, so we will include such facilities in
the number of openings and strive to achieve the target of 100 facilities next term.
As for the construction trends, I do not know. I met with an executive of a major developer
yesterday, and they were troubled by the increase in land and construction costs. In such asituation, we will do our best.

Q&A: About M&A
Questioner: M&A often comes with failures. Do you have a special M&A task force within thecompany, or are you actively engaging with M&A support companies, etc.? Could you share yourthoughts?
Shimomura: I think M&A cases come up as projects because the operations are not going well.
One of our approaches is whether there is synergy.
The reasons for not doing well are immediately apparent upon investigation. In many cases,
admissions have not been seriously promoted, leaving it to the site. From the perspective of
the site staff, fewer residents are easier to manage, so in many cases we have seen, they
were reluctant to accept residents with higher care needs.
In the case of "Like", it was mostly left to the site. However, we supported the entire
company and promoted sales, which enabled full occupancy.
In M&A, we first look for synergy, compatibility with our philosophy, and areas we can
improve. We don't undertake M&A indiscriminately.

Q&A: About Overseas Expansion
Questioner: Regarding new businesses, there is a trend of aging in Southeast Asia, and many
companies in the aging business are expanding there. Does your company plan to expand
domestically and not include overseas in your scope?
Shimomura: We do not intend to operate overseas due to the risks involved in overseas
operations.
However, we have received invitations from various countries' companies. Currently, we havean offer from South Korea, and we cannot outright reject it, so we have communicated that
"we will not participate in operations, but we are not reluctant to support". We plan tovisit South Korea this month to inspect and discuss with the other party how we can provide
our accumulated know-how and enable operations.
23

Q&A: About High-Priced Facilities' Occupancy Rate
Questioner: I would like to ask about high-priced facilities. Their occupancy rate has notbeen achieved as initially planned and has taken over three years. How do you analyze thisand what do you think is the problem?
Shimomura: The cause is not entirely clear. Although there are demands among the wealthy,
many such individuals have helpers, among other situations.
Also, many prefer to stay in their own homes. However, I believe the situation of home careis gradually becoming more challenging, and it is just taking longer than expected.
The monthly fee per person for high-priced facilities is about 1 million yen, and with theaddition of 200,000 yen from care insurance, the total monthly fee becomes 1.2 million yen.
Therefore, an increase of one person translates into a 14.4 million yen increase annually.
As for the increase in costs, food expenses are about one million yen annually, which meansthat most of the 14.4 million yen in revenue is added to the profit.
For example, if five more people move in, that adds about 70 million yen in annual revenue,
with only one or two additional staff required, so the revenue-profit margin increases
significantly once the break-even point is reached. We are currently taking longer than
expected to reach this point, but once we do, profits will rise significantly.
We do not undertake high-priced facility projects indiscriminately but plan to develop themin balance with mid-priced facilities.
Interestingly, for this term, mid-priced facilities have filled up quickly, with somefacilities receiving about 30 admissions in the first month. This has turned what was anegative factor in our performance into a positive one. Previously, new openings were
dragging us down, but now they are contributing positively.
However, we still want to maintain our brand power by operating high-priced facilities.
There are significant demands, so we will continue working on this balance.
Questioner: The significant success of new openings is largely due to the end of thepandemic, correct? Do you think it has become easier to operate post-pandemic?
Shimomura: It's not just that. This term, various initiatives such as staff optimization and
IT integration have collectively functioned well. In fact, productivity per employee has
increased by 25,000 yen. Since the amount of money received from customers has not changed,
this means a reduction in the number of staff. We have not received any complaints from
customers about the reduction in staff.
24

Human potential is immeasurable. One of my favorite phrases is "Jō Fushin", meaning "Do notbelieve in the status quo", which refers to breaking the current situation.
Currently within our company, we are attempting to change the methods of working themselves.
We have designated a model home and are experimentally engaging in work reforms that differ
from the current IT integration and optimization.
In the long-term care industry, what has been done historically is considered correct. We
are trying to break this down and attempt something new. If it doesn't work out, we can goback to how it was. We are undertaking such fundamental changes throughout the company.

25