First Quarter of FY 3/2020

Financial Results
Briefing Materials
August 7, 2019

TSE 1 Code: 6569

NISSO CORPORATIONCONTENTS

１. Financial Results Summary for FY 3/2020 1Q
１-１ Overview of Activities
１-２ Future Prospects
２. Earnings Forecast for FY 3/2020

３. Shareholder Return Policy

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved11.

Financial Results Summary for FY 3/2020 1Q

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved2

FY 3/2020 1Q Non-consolidated Financial Results Highlights
Although clients were cautious about increasing staff due to the U.S.-China trade friction and the impact of consumption
taxes at FY-start, demand for human resources increased from mid-May, spurring a 13.5% YOY increase in net sales due tothe placement of skilled staff mainly in the automobiles Account Company
In terms of costs, although upfront investments such as housing-related and educational costs, as well as lump-sum
payments to employees were incurred for 2Q, operating profit increased by 17.3% due to efforts to control SG&A expenses（Unit: Million yen）

FY 3/2019 1Q
Results
Net sales
Gross profit
SG&A expenses
Operating profit
Ordinary profit
ProfitFY 3/2020 1Q% of Total

Results

Year-on-Year% of Total

Increase(Decrease)% Change

14,590100.0%

16,566100.0%

1,975

13.5%

2,515

17.2%

2,794

16.9%

279

11.1%

2,115

14.5%

2,325

14.0%

210

9.9%

399

2.7%

468

2.8%

69

17.3%

411

2.8%

469

2.8%

58

14.2%

259

1.8%

342

2.1%

82

31.7%

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved3

FY 3/2020 1Q Quarterly Non-consolidated Financial Results Trend
Operating profit

Net sales（Unit: Million yen）

（Unit: Million yen）

18,0001,200
16,962
16,542

16,566

1,044

1,000
16,000940

15,378800

14,590703

14,101 14,100

14,000577

600
12,325443

12,657400

12,000Upfront investment for
growth after 2Q・New graduate preemployment education
・Recruitment costs
・Skills education costs
etc.

337

312

１Q

２Q

399
468

200

10,000

0
１Q

２Q

３Q

４Q

【FY 3/2018】

１Q

２Q

３Q

【FY 3/2019】

４Q

１Q【FY 3/2020】

３Q

４Q【FY 3/2018】

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

１Q

２Q

３Q

【FY 3/2019】

４Q

１Q【FY 3/2020】4

Trend of Enrolled Staff (NISSO, Non-consolidated)
Trend of Number of Enrolled at FY-end（ Unit: # of Staff ）

15,00014,042

14,00013,000＋240
staff/3 mos.

11,497
10,561

10,0009,000

Increase of 240 staff from previous
FY-end (1.7%)

12,44412,00011,00014,282

＋936
staff
/year

＋947
staff
/year

14,634+352
staff/1 mo.

Increases in mainly automobiles-relatedcompanies
Although the domestic manufacturingmindset was sluggish, production
conditions showed signs of recovery
from the second half of 1Q, and orders
to NISSO increased＋1,598
staff/year

14,634 staff enrolled at July-end
Expected to increase enrollment steadilyin the future

8,000
7,000
FY 3/16-end

FY 3/17-end

FY 3/18-end

FY 3/19-end

FY 3/20
1Q-endJuly-end

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved5

FY 3/2020 1Q Consolidated Financial Results Highlights
Human Resources Services Business: Skilled staff and Account Companies strategies continued to develop, and although impactsof client company trends at FY-start, in addition to the incurrence of upfront investment for
2Q, business performance remained strong
Other Businesses: Increase in net sales due to increases in the number of residents at Sweetpea Higashi Totsuka, promotion ofoperational efficiency, and recording of profits（Unit: Million yen）

FY 3/2019 1Q
Results
Net sales

Gross profit
SG&A expenses
Operating profit
Ordinary profit

Profit attributableto owners of parent% of Total

FY 3/2020 1Q
Results

Year-on-Year% of Total

Increase(Decrease)% Change

15,999100.0%

17,983100.0%

1,984

12.4%

2,661

16.6%

2,964

16.5%

302

11.4%

2,288

14.3%

2,486

13.8%

197

8.6%

372

2.3%

477

2.7%

104

28.2%

389

2.4%

490

2.7%

101

26.0%

242

1.5%

357

2.0%

115

47.6%

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6

FY 3/2020 Quarterly Consolidated Financial Results
Operating profit

Net sales（Unit: Million yen）

（Unit: Million yen）

1,200

20,0001,039

18,435
17,942 17,983

1,000

16,784
15,613 15,521

914

800

15,999717

600

15,000542

14,166
13,907400

Upfront investment for
growth after 2Q・New graduate preemployment education
・Recruitment costs
・Skills education costs
etc.

396

381
304

372

477

200

0

10,000

１Q

２Q

３Q【FY 3/2018】

４Q

１Q

２Q

３Q

【FY 3/2019】

４Q

１Q【FY 3/2020】

１Q

２Q

３Q

【FY 3/2018】

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

４Q

１Q

２Q

３Q

【FY 3/2019】

４Q

１Q【FY 3/2020】7

1-１ Overview of Activities

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved8

1Q Net Sales by Industry (NISSO, Non-consolidated)
Trend of Net Sales Composition Ratios
Automobiles（Unit: Million yen）

Automobiles

Elec. devices

2,607（17.9%）

10,000Precision・Elec. machinery

Other

2,631

+0.9％

（15.9％）(2.2％)（14.3％）

2,371

Net sales in the automobiles industry, where there isa high composition ratio, grew substantially
Net sales are expected to increase in the future due to
new model launches and strong production of high-end
models2,424（16.6％）(6.3％)

4,057

4,330
（29.7％）+43.6％
5,227

Electronic devices（24.5％）

7,505（45.3％）

Although demand continued to stagnate fromthe previous FY-end, and net sales declined YOY,
net sales are expected to increase in the futurewith partial increases production for smartphones andin-vehicle components after Golden Week

（35.8％）0FY 3/19 1Q

FY 3/20 1Q※（ ）= % of Total net sales, □ = % of Year-on-Year growth

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9Trend of Net Sales per Capita（NISSO, Non-consolidated）
FY 3/20 1Q net sales per capita: 391 thousand yen
As a result of staff assignment to "next" (future) Account Companies, etc., net sales per capita is at same level as
previous FY results
Net Sales per Capita (monthly average conversion)

Net Sales per Capita (quarterly)（Unit: Thousand yen）

（Unit: Thousand yen）

450

450
400
350

391

367

344

391
400

300

200
150

100

379

383

FY 3/19

FY 3/19

1Q

2Q

392

391

FY 3/19

FY 3/19

FY 3/20

3Q

4Q

1Q

350

+24,500 yen
/year

250

410

300
＋22,000 yen
/year

250

50
0

200
FY 3/17

FY 3/18

FY 3/19

FY 3/20
1Q

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10Number of Skilled Staff（NISSO, Non-consolidated）
Trend in Number of Skilled Staff（ Unit: # of Staff ）4,501
Number of skilled staff are increasing steadily

3,904
3,459

NISSO will continue to promote the development of skilled
staff and strive to promote their assignment to high unit-cost
production sites centering on Account Companies

2,611
2,034
1,600

FY 3/18-end

FY 3/19

FY 3/19

FY 3/19

Jun.-end

Sep.-end

Dec.-end

FY 3/19-end

FY 3/20
Jun.-end

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved11Account Companies (NISSO, Non-consolidated)Account Company Groups Net Sales and % of Total（Unit: Million yen/％）
8,000

44.5%

7,300
7,000

44.0%
43.5%

44.1%

6,107
6,000

43.0%
42.5%

41.9%

42.0%

5,000

Account Companies net sales share ratio in 1Q was
44.1%

Production conditions of Account Company Groups grewsignificantly for the automobiles company group
Although demand from electronic components companies
continued to stagnate from the second half of theprevious FY, production recovered after Golden Week

41.5%
41.0%

4,000

Future production trends of Account Company Groups are
expected to remain strong

40.5%

FY 3/19 1Q

FY 3/20 1Q

FY 3/19 1Q

FY 3/20 1Q

Increase

Accounts total(4 Groups)

6,107

7,300

1,192

Total net sales

14,59016,566

1,975% of Total

41.9%

44.1%

2.2 pts[Reference]
FY 3/19 % of Total: 43.3%

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12Turnover Rates (NISSO, Non-consolidated)
FY 3/2020 1Q Overall turnover rate: 4.4% (-0.2 pts vs. FY 3/2019)

Skilled staff turnover rate remained at 1.5% from FY 3/2019

Trend of Turnover rates（Unit：％）
7

5.9

6

5.5
4.9

5

4.6

4.4
Overall

4
3

1.7

2

1.5

Skilled
staff

1.5

1
0
FY 3/16

FY 3/17

FY 3/18

FY 3/19

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FY 3/20 1Q(Apr.~Jun.)

13

Educational Achievements（NISSO, Non-consolidated）
1Q Course-specific educational achievements(total # of participants)
Training course
nameSkilled staff
education
Accredited
vocational training
education

1Q(Apr - Jun)

（ Unit: # of Participants）

FY 3/19Total

393 Standard skilled staff education

2,522

72

Accredited vocational training school(Miyagi・Nagano Prefectures)

Manufacturing
education

312

MONOZUKURI (manufacturing) {basic,
advanced, expert} education, preassignment training for manufacturing staff,
mobile education

Safety education

162 Danger・risk simulation education

1,322

Basic
maintenanceeducation

39

Basic equipment maintenanceeducation

167

Employeeeducation
Other education
Total

New graduate/mid-career entry/mid-level

184 employee training, newly appointed chief
education, on-site supervisor education

28
1,190

Entrusted education from external sources

1,190 educational participants for 1Q

318
3,047

Steady increase in participants for basic
maintenance education; working at major
semiconductor manufacturers upon course
completion

292
22
7,690

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14

Other Businesses Business Revenue
Results of Other Businesses
FY 3/19 1Q（Unit: Million yen・％）

FY 3/20 1Q

FY 3/19

Year-on-Year

Results% of Total

Results% of Total

Increase(Decrease)% Change

Full year

Net sales

587

100.0%

673

100.0%

85

14.5％

2,485

Expenses669

113.9%

663

98.7%

(5)

(0.8％)

2,732

Operatingprofit (loss)(81)(13.9%)

9

1.3%

90

－

(247)

 Increase in net sales due to increase in number of residents at Sweetpea Higashi Totsuka
 Other facilities (Bldg. 1 - 5) maintained high occupancy rates
 Aiming to achieve full year profitability through continued increase in Higashi Totsuka residents andpromotion of efforts to control expenses

Trend in # of facility residents[Bldg.1-5] (capacity:308)

300

# of
列4
residents

297
292

290

96.4%
94.8%

Occupancy
列5
rate

297

100%

96.4%

95.7%

50

95%

10

280

90%
Sep '18-end

Dec '18-end

Mar '19-end

Jun '19-end

0

100%

33

30
20

入居率

44

40

295

Occupancy
rate

# of
residents
入居者数[Bldg.6] (capacity:94)

27

21
22.3%

28.7%

Sep '18-end

Dec '18-end

35.1%

48.4%
0%

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Mar '19-end

Jun '19-end

15

1Q Financial Results Summary
Consolidated Financial Results
Net Sales
17,983 Million yen（+12.4% year-on-year）

Operating Profit

477 Million yen（+28.2% year-on-year）

 Net sales remained strong
 Implemented upfront investment in initial expenses (key money, brokerage fees) related
to establishment of dormitories corresponding to new transactions, as well as for
personnel expenses such as bonuses, etc.

Net Sales by Industry
Automobiles…+43.6%
Electronic devices…(6.3%)

 Net sales for the automobiles industry were maintained at previous 4Q level

Quarter-end Number ofEnrolled Staff
14,282 Staff（+240 from FY 3/19-end） Net increase during the quarter decreased compared to FY 3/19 1Q…+606 Staff in FY 3/19 1Q

Net Sales per Capita/Monthly
391 Thousand yen(approx. same level vs. FY 3/19）…+12 Thousand yen in FY 3/19 1Q

 With regards to the electronic devices industry, although smartphone-related net sales
decline affected the first half of 1Q, there was a certain amount of recovery

 With the recovery in the electronics devices industry, number of enrolled staff at Julyend was 14,634, or +352 compared to June-end

 Price (unit-cost) negotiations progressed as planned In 1Q, while production trends of some Account Companies were cautius, NISSO plans toincrease dispatching to next (future) Account Companies, which have relatively mid-levelunit-costs

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved16

1-2 Future Prospects

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17Future Market Trends

DemandEnvironment

Automobiles･･･With the introduction of new car models and stable production of high-end models,
production is expected to remain on an upward trend, supported by strong domestic and overseas
demand from finished vehicles and parts (high prices expected to end in the middle of 2Q)
Electronic devices･･･Automotive parts and related parts tend to increase due to demand forelectrical equipment and self-driving related technologies (parts for accident prevention functions)

Recruiting
Environment

While the effective opening-to-application ratio of jobs has been high, job openings in the
manufacturing industry have tended to decrease, but demand from clients at the moment (jobs)
have tended to increase

ClientEnvironment

Human resources strategies of the client companies have not changed the flow from direct
employment to the use of external human resources

NISSO's client trends have been steady, and demandfor human resources is expected to increase
Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

18Topics
Creation of diverse job opportunities
Collaboration with Nikon Corporation in the Dispatching Business
NISSO has established a partnership with Nikon Corporation in connection with Nikon Staff Service Corporation(Representative Director: Hiroyuki Yamaishi, Shinagawa-ku, Tokyo), a subsidiary of Nikon Corporation(Representative Director: Toshikazu Umatate, Minato-ku, Tokyo) in the dispatching business, where a basic
agreement was concluded.
Notice of Collaboration with Nikon Corporation in the Dispatching Business (announced July 12, 2019)

Against the backdrop of a declining birthrate・aging population and a declining labor force, the activities of the elderly
and women are progressing.
As a result, it has become necessary to create an environment where people can work in various ways, such as working
hours, places of work, working conditions, work contents, etc., and at the same time, increasing labor productivity has
become a major issue for Japan.
NISSO felt the need to develop opportunities for diverse human resources to work, and has positioned this collaboration
as a concrete first-step in addressing these issues, and in doing so, has reached a basic agreement.

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

19Topics
Utilization of overseas human resources

Nurturing of New Graduate Chinese Engineers
・1st Term（Company entrance: September 2018 10 graduates）→ Actively working in client companies using specialized, technologicalknowledge
・September 2019 Company entrance of 18 graduates for 2nd Termis planned

Utilization of Foreigners of Japanese decent
・Recruitment of human resources utilizing Japanese communities in regional areas
・Launch of trial production sites (High retention rate results)
・Future activities Launch of horizontal deployment-type foreign workers utilization production sites
Development of leaders, expansion of communities, and increase in recruitment

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20

ESG Activities
Nisso Pure Appreciation Festival

NISSO's special-purpose subsidiary "Nisso Pure Co., Ltd." held
an annual activity report meeting.
This year's event (12th Annual) was celebrated by a total of 385
visitors, and school officials, employment support agencies andparents visiting.

••

Great East Japan Earthquake 2019 Reconstruction(6/23/2019)
Support Activities(7/25・26, 2019)

At the Appreciation Festival, employees with disabilities
presented the results of their daily activities to visitors andperformed demonstration sales
Also, employees with disabilities interviewed top executives ofeach Nisso Group company and distributed the contents innewspaper-form.

Since after the Great East Japan Earthquake, Yokohama FC
has been carrying out reconstruction support activities for eight
years in Fukushima Prefecture with the catchphrase "Do not get
weathered. Continuation of support". This year, NISSO cosponsored the activities.

（Notes presented to children）

This year, a "Reconstruction Support Match" was held at J
Village, which was fully reopened in April 2019 as a symbol ofreconstruction• On the same day, we sponsored a soccer class for children andsupported the reconstruction.
21
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２. Earnings Forecast for FY 3/2020

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved22Outlook for Consolidated Earnings Trends
Net sales

Operating profit（Unit: Million yen）

80,00080,000（Unit: Million yen）

4,500

3,900

4,000

69,16170,000

3,500

2,869

3,000

59,20860,000

2,500

1,500
50,000

1,800

2,000

53,53347,335

999

1,000

860

500
0

40,000FY 3/16

FY 3/17

FY 3/18

FY 3/19

FY 3/20
Expected

FY 3/16

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

FY 3/17

FY 3/18

FY 3/19

FY 3/20
Expected23

３. Shareholder Return Policy

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved24Shareholder Return Policy
NISSO considers the redistribution of profits to shareholders and the enhancement of corporate value as key
management issues, taking into consideration the balance between securing funds for growth investments andstrengthening the corporate structure that can respond to changes in the business environment, and our basic
policy is to continue to steadily redistribute profits to all of our shareholders.

FY 3/19 dividend payout

18.5 yen/share(Consolidated dividend
payout ratio 30.0%)

FY 3/20 dividend(Expected)

25.0 yen/share(Consolidated dividend
payout ratio 30.4%)

NISSO's common stock was split at a ratio of 2 shares for 1 share on May 1, 2019,
and the FY 3/19 dividend payout shown above is the dividend payout amount after the stock split.

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

25

The forward-looking statements and performance forecasts contained in this document are forecasts
determined by NISSO based on information available at the time of preparation, and include potential risks
and uncertainties. Therefore, please be aware that the actual results may differ greatly from the forwardlooking statements described due to changes in various factors.

〈For future IR-related inquiries〉

IR Division, PR・IR Department
NISSO COROPORATION
TEL： 045-777-7630
E-mail ： ir@nisso.co.jp
URL：

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

http://www.nisso.co.jp/26