The Effects of COVID-19 on Our Business and Structural Reforms Targe
COVID-19 has had only a limited impact on our business, and its effects are diminishing. By making structural reforms inresponse to social and economic changes, we will substantially improve productivity and strengthen sales capabilities tooutperform our competitors.

Short-Term Effects of COVID-19◆ Recent Business Conditions amid the COVID-19 Pandemic
The effects of COVID-19 on the COMSYS Group’s main businesses—the Telecommunications Construction, IT Solutions,and Social System-Related business—have been comparatively
slight, and these effects have been falling since the secondquarter. In the first quarter, we experienced delays in sales andconstruction, and net sales fell substantially year on year as aresult. Even so, we maintained our business by focusing carefully on employee health management and disease prevention.

Since the second quarter, effects on business have graduallydeclined. Teleworking-related cost reductions, including travel
and transportation expenses, lifted second-quarter profits yearon year. The potential spread of COVID-19 remains a concern,but by implementing measures and completing construction
projects in the second half, we expect to reach the businesstargets we laid out at the beginning of the fiscal year.

◆ Changes in the Business Environment and Outlook for the Future
Telecommunications Carrier BusinessNet sales and profits decreased due to COVID-19, but we
expect to meet our initial full-year targets nevertheless. In thefirst quarter, customer restrictions on our entry into base station facilities delayed negotiations and consultation, as well as
the completion of construction work in the mobile business.
However, business has picked back up since the second quarter. We believe the rollout of new base stations will accelerate
in the second half, as telecommunications carriers move forward with their plans to build 5G networks. Accordingly, weexpect a concentration of 5G base station construction projects
in this period. To meet these needs, we will make better useof our construction resources by assigning personnel flexibly
across Group companies.
IT Solutions BusinessIn this category, the COMSYS Group has broad-ranging private-sector customers across a range of industries, so the ITSolutions business has been significantly affected by COVID19. Specifically, we experienced a substantial number of
postponed or suspended orders by hard-hit customers in thetravel, lodging, and related industries. We expect this environment to persist throughout the second half and beyond.

By contrast, demand is increasing in such areas as teleworking and the GIGA School. In the first half, we experienced anationwide recovery in orders involving GIGA School projects.
Going forward, we will cultivate new demand through solution
development and proposal-making activities aimed at building
teleworking environments and reinforcing telecommunication
networks.
Social System-Related Business
COVID-19 has had a limited effect on the Social System-Relatedbusiness. At some Group companies, the consumer business(NDS’s real estate business and Kando’s sales of gas equipment)
has been deeply affected by curtailed selling activities. Overall,
the segment has been relatively unaffected, however, as thesecategories account for only a fraction of the Social SystemRelated business. Sales have been essentially on target in key
business categories: electrical, telecommunications, and civilengineering construction for private-sector companies and government agencies. Even so, we will carefully monitor customer
trends. Planned projects could still be deferred or suspended if
government agencies reallocate budgets to prioritize COVID19 responses or if the economic slowdown causes renewableenergy customers to change their investment plans.

Long-Term Effects of COVID-19 and Related Business Strategies◆ Changes in the Business Environment
The Group’s business has been relatively unaffected byCOVID-19, and as of early December 2020 the spreadof the infection in Japan has been comparatively slow.
Nevertheless, we expect the pandemic to leave a lasting

impression on consumer behavior and, by extension, onsociety and the economy. Therefore, we recognize theneed to undertake structural reforms that address the“new normal;” we must respond to emerging customer

outline

strategybusiness base

ESG

about useting the “New Normal”
needs. Under COVID-19, online activities have grown moreprevalent in almost all aspects of life. Examples include
the rapid adoption of teleworking and remote education,accompanied by declines in travel and face-to-face meetings and an increasing number of flexible work locations.
To date, the COMSYS Group has promoted teleworking
to help contain the virus. Going forward, we will need to

re-examine workstyles, sales activities, and optimal forms
for organizations and offices through this new teleworking
lens. Some industries have been negatively affected by thepandemic, while others (e.g., e-commerce, distribution andvideo streaming) have benefited. We will actively seek out
and seize new business opportunities.

◆ Changing Strategies Based on Changes in the Business Environment
The COMSYS Group has adopted “COMSYS Vision NEXT
STAGE 2023,” a medium-term plan extending throughthe fiscal year ending March 31, 2024. Under this plan,we will strive to enhance corporate value by generating synergies from business integration and expanding
growth businesses. We maintain the plan’s objectives
despite COVID-19; we will promote a range of Groupwide
initiatives, such as integrating IT systems, standardizing
workflows, streamlining and optimizing operational structures and bases, and consolidating operations that over-lap. COVID-19 has exacerbated the need to conduct theseinitiatives rapidly and efficiently. In response to changing
customer needs, we will quickly optimize the allocation ofresources to Group sales and construction functions. We
will also re-examine organizations and bases for greater
flexibility, using teleworking as our new norm. We plan tocombine these structural reforms with the effective use ofICT to promote a digital transformation (DX) throughout
the COMSYS Group.

◆ Changes in Workstyles and Structural Reforms Resulting from DX
To meet the objectives of its medium-term vision, theCOMSYS Group has been adopting productivity-enhancing information technologies and introducing workstylereforms to attract diverse and skilled human resources.
We will also strive toward “data-driven management,”
which emphasizes the role of objective data in making
decisions and prioritizing initiatives. We established theDX Promotion Department on July 1, 2020, to oversee
these initiatives. When introducing ICT on construction
sites and back-office operations, the department identifies and analyzes issues arising in systems and work-styles. As a next step, we will review existing structuresand introduce new systems, emphasizing areas with thegreatest impacts on costs. We have also begun optimizing
operating structures in the Tokyo area. We will identify
overlapping functions and bases at Group companies
with a view to streamlining resources and reducing costs.
When arranging working locations, we will keep down
real estate costs by making teleworking the norm. Making
use of teleworking and revising HR systems will allow theGroup to hire more diverse personnel, including seniors,
part-time workers, and employees raising children.

Promoting Structural Reforms to Accommodate the “New Normal”
Changes in theBusiness Environment●We recognize that the social and economic changes brought about by
COVID-19 will persist even after the virus has been brought under control.
⇒Teleworking, online meetings, and paperless offices
The ongoing shift to online activities is causing business practices to change, involving less travel, a migration fromcities to outlying regions, and increased demand for high-speed, high-capacity communications.
●We will seize new business opportunities and promote structural reforms
in response to these societal changes.

Seizing New Business Opportunities

Workstyle Reforms and DX Activities●Ministry of Internal Affairs and Communications (MIC) Project on
Promoting Advanced Radio Environment Improvements⇒Nationwide use of the Group’s resources●Strengthening the Data Center Business⇒Responding to the expansion of data centers resulting from the increase
in cloud applications by starting up teams across multiple Group entities
to handle all processes from building construction to electric power andtelecommunications construction●Local 5G⇒Rapid implementation of projects, mainly in collaboration with the NTTGroup●Seeking out New Growth Businesses⇒Solution proposals related to teleworking and telecommunications security●Fundamentally Reviewing Workflows⇒Improving productivity through teleworking and pursuing higher added
value as a prime contractor●Promoting Diversity⇒Promoting workstyle reforms and the use of diverse human resources,
including women, seniors, and part-time employees●Aggregating Business Bases and Back-Office Operations⇒Integrating business bases and consolidating back-office operations
nationwide●Optimizing the Allocation of Functions Groupwide⇒Optimizing overall business functions at each Group company on agroup-wide basis and improving productivity and customer support