First Six Months of FY 3/2020

Financial Results
Briefing Materials
November 11, 2019

TSE 1 Code: 6569

NISSO CORPORATIONCONTENTS
1. Financial Results Summary for the First Six Months of FY 3/2020
１-１ Overview of Activities
１-２ Future Prospects
2. Earnings Forecast for FY 3/2020

3. Shareholder Return Policy
4. Supplementary Materials

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved11.

Financial Results Summary
for the First Six Months of FY 3/2020 (2Q)

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved2

FY 3/2020 2Q Non-consolidated Financial Results Highlights
Net sales increased by 13.3% YOY mainly due to the strong performance of the automobiles Account Company GroupIn terms of costs, operating profit increased by 15.8% YOY due to continued efforts to control SG&A expenses（Unit: Million yen）

FY 3/19 2Q
Results
Net sales

FY 3/20 2Q% of Total

Results

Year-on-Year% of Total

Increase(Decrease)% Change

29,969100.0%

33,955100.0%

3,986

13.3%

Gross profit

5,228

17.4%

5,887

17.3%

659

12.6%

SG&A expenses

4,251

14.2%

4,756

14.0%

504

11.9%

Operating profit

977

3.3%

1,131

3.3%

154

15.8%

Ordinary profit

983

3.3%

1,136

3.3%

153

15.6%

Profit

629

2.1%

777

2.3%

147

23.5%

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仮数字3

FY 3/2020 Quarterly Non-consolidated Financial Results Trends
Operating profit

Net sales（Unit: Million yen）

（Unit: Million yen）

18,00017,38916,962
16,542 16,566

仮数字

1,200
1,044

1,000

16,000940

15,378

14,101

14,00014,100800

14,590

663

703

577

600

468
443

12,657
12,325400

12,000

337

312

１Q

２Q

399

200

0

10,000

１Q

２Q

３Q【FY 3/18】

４Q

１Q

２Q

３Q

【FY 3/19】

４Q

１Q

２Q

【FY 3/20】

３Q【FY 3/18】

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

４Q

１Q

２Q

３Q

【FY 3/19】

４Q

１Q

２Q

【FY 3/20】

4

FY 3/2020 2Q Consolidated Financial Results Highlights
General Human Resources Services Business: Continued development/expansion of skilled staff and Account Companies strategies
Although there were delays in the market recovery in some parts of the electronic devices industry, business performance
expanded due to steady performance in the automobiles-related industry
Other Businesses: Increase in net sales due to increases in the number of residents at Sweetpea Higashi Totsuka; aiming for
further increase in number of residents（Unit: Million yen）
FY 3/19 2Q
Results
Net sales

FY 3/20 2Q% of Total

Results

Year-on-Year% of Total

Increase(Decrease)% Change

32,783100.0%

36,797100.0%

4,014

12.2%

Gross profit

5,508

16.8%

6,210

16.9%

701

12.7%

SG&A expenses

4,593

14.0%

5,082

13.8%

488

10.6%

Operating profit

915

2.8%

1,128

3.1%

212

23.2%

Ordinary profit

930

2.8%

1,154

3.1%

223

24.0%

Profit attributable toowners of parent

588

1.8%

785

2.1%

197

33.5%

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved5

FY 3/2020 Quarterly Consolidated Financial Results Trends
Net sales

Operating profit（Unit: Million yen）

（Unit: Million yen）

20,00018,814

1,200

18,435

1,039

17,942

17,983

1,000

914

16,784
15,613 15,521

15,000800

15,999

717

650

600

14,166542

477

13,907

400

396

381
304

372

200

0

10,000

１Q

２Q

３Q【FY 3/18】

４Q

１Q

２Q

３Q

【FY 3/19】

４Q

１Q

２Q

【FY 3/20】

１Q

２Q

３Q

【FY 3/18】

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

４Q

１Q

２Q

３Q

【FY 3/19】

４Q

１Q

２Q

【FY 3/20】

6

Progress of Consolidated Earnings Outlooks【Net sales】
90,000【Operating profit（Margin）】(Unit: Million yen/%)80,00069,161

20,000
２Q
YTD
10,0000(Unit: Million yen/%)

45.0%

3,900

（4.9％）（Expected）

4,000

47.5%

2,869

59,20847.0%【47.4%】【46.0%】【47.4%】

28,073

2,000

46.0%

32,78336,797

２Q
Progress1,000

FY 3/20

30.0%

25.0%

1,800

（3.0％）

20.0%

1,500

【31.9%】【28.9%】【38.1%】

15.0%

10.0%

45.5%

２Q
YTD

FY 3/19（4.1％）

3,000

Full year2,500
46.5%
Results

45.0%

FY 3/18

40.0%

35.0%

3,500

50,00040,000２Q
Progress
30,0004,500（Expected）

80,00070,000
Full year
Results
60,000

48.0%

500

686

915

1,128

5.0%

0.0%

0

FY 3/18

FY 3/19

FY 3/20・ Progress toward FY earnings outlooks is trending similarly to previous year
・ The second half of the FY (2H) will be the recovery period for priority investments made in the first half (1H), mainly in 1Q
Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved7Outlook for Earnings Trends【Net sales】
55

55

59

58

(Unit: Million yen)

(Unit: Million yen)

YTD

20,00090,0001,600

80,0001,400

Quarterly

70,00060,00015,00050,0003,900
Quarterly

YTD

30,00020,0005,000

10,000

１Q

２Q

３Q
４Q
Expected Expected

0

4,000
3,500

1,200

3,000

1,000

2,500
800
2,000

40,00010,0000Quarterly

Quarterly

80,000

YTD

25,000

仮数字
4,500
YTD

Working days

【Operating profit】

600

1,500

400

1,000

200
0

500
１Q

２Q

３Q
４Q
Expected Expected

0・ Orders from automobiles-related clients have been decided for 2H, and NISSO will take advantage of investments made in 1Q toexpand business performance・ Although the half-year allocation of full year earnings is ordinarily 1:2, it is expected to be 1:2.5 for this FY
Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved8

1-１ Overview of Activities

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9

2Q Net Sales by Industry (NISSO, Non-consolidated)
Trend of Net Sales Composition Ratios(Unit: Million yen/%)Automobiles

Elec. devices

Prec.・Elec. machinery

修正後2Electronic devices

Other

5,312
+0.3％
5,298
（17.7%）

Although the electronic components-related industry
was on a recovery trend in the second half of 2Q, due
to the impact of the market environment, full-scale
recovery is expected to be delayed until 2H; increasein net sales was not attained（15.6％）

4,688
▲2.9％

（13.8％）

4,829（16.1％）

8,690
▲3.2％

（25.6％）

Bottomed out andrecovering

Automobiles

8,976（30.0％）

10,863+40.5％Net sales in the automobiles industry, where there is ahigh composition ratio, expanded due to increased
demand for human resources at existing business
partners, growth of "next" (future) Account Companies
and unit-cost negotiations

15,263（45.0％）（36.3 ％）

Expandingsteadily

FY 3/19 2Q

FY 3/20 2Q※（ ）= % of Total net sales, □ = % of Year-on-Year growth

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10Trend of Net Sales per Capita（NISSO, Non-consolidated）
FY 3/20 2Q (YTD) net sales per capita: 394 thousand yen
Promoted assignment centering on high unit-cost automobiles Account Companies, resulting in increase in net sales per capita

Net Sales per Capita (monthly average conversion)（Unit: Thousand yen）

（Unit: Thousand yen）

450

450
400
350

367

344

394

391

+2,300 yen/6 months+24,500 yen
/year

250
200

100

410
400

300

150

Net Sales per Capita (quarterly)

379

383

FY 3/19
1Q

FY 3/19
2Q

392

391

FY 3/194Q

FY 3/20
1Q

396

350

300
＋22,000 yen
/year

250

50
0

200
FY 3/17

FY 3/18

FY 3/19

FY 3/20 2Q

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

FY 3/193Q

FY 3/20
2Q

11

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

14,63915,00014,042

14,000

Increase of 597 staff from previous
FY-end (4.3%)

13,00012,44412,00011,00011,497
10,561

Increases in mainly automobiles-relatedcompanies

＋947
staff
/year

10,0009,000＋1,598
staff
/year

＋597
staff
/6 mos.

＋936
staff
/year

8,000
7,000

FY 3/16-end

FY 3/17-end

FY 3/18-end

FY 3/19-end

FY 3/20
2Q-endCopyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

12Number of Skilled Staff（NISSO, Non-consolidated）
Trend in Number of Skilled Staff（ Unit: # of Staff ）Number of skilled staff is increasing as planned
4,501

4,803
NISSO will continue to develop skilled staff andpromote their assignment in accordance todemands from high unit-cost Account Companies

3,904
3,459

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

FY 3/20

Jun.-end

Sep.-end

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved13Account Companies (NISSO, Non-consolidated)Account Company Groups Net Sales and % of Total（Unit: Million yen/％）

14,97815,00012,672

44.5%
44.0%
43.5%

10,000

44.1%

43.0%
42.5%

5,000

42.0%

42.3%

41.5%
0

41.0%

FY 3/19 2Q

Account Companies net sales share ratio in 2Q was
44.1%

FY 3/20 2Q

FY 3/19 2Q

FY 3/20 2Q

Accounts total(4 Groups)

12,672

14,9782,305

Total net sales

29,96833,955

3,986% of Total

42.3 %

44.1%

1.8 pts

The automobiles Account Company Group grewsignificantly, and net sales increased due to the active
assignment of skilled staff
The electrical machinery Account Company Group
increased net sales due to favorable production ofsemiconductor-related products and assignment of
personnel who completed training
The electronics components Account Company Group
did not attain an increase in net sales due to the delay
in full-scale recovery from 2H onwards

Increase

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14Turnover Rates (NISSO, Non-consolidated)
FY 3/2020 2Q

Overall turnover rate: 4.6%
Skilled staff turnover rate: 1.8%(±0 pts vs. FY 3/2019)(+0.3 pts vs. FY 3/2019)

Turnover rates increased due to reduction of business with some business partners

Trend of Turnover rates（Unit：％）
7

5.9
6

5.5
4.9

5

4.6

Overall

4.4

4.6

4
Skilled
staff

3
2

1.7

1.5

1.5

FY 3/18

FY 3/19

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

1.8

1
0

FY 3/16

FY 3/17

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FY 3/20 2Q(Apr.~Sep.)

15

Educational Achievements（NISSO, Non-consolidated）
2Q Course-specific educational achievements(total # of participants)（ Unit: # of Participants）

Training course
1Q
2Q
name
(Apr - Jun) (Jul - Sep)
Skilled staff
education
Accredited
vocational
training education

393
72

FY 3/20YTD

483 Standard skilled staff education
57

Accredited vocational training school(Miyagi・Nagano Prefectures)

717

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

Manufacturing
education

312

Safety education

162

Basic
maintenanceeducation

39

65

Employeeeducation

184

115 employee training, newly appointed chief

Other education

28

Total

1,190

1,182 Danger・risk simulation education
Basic equipment maintenanceeducation
New graduate/mid-career entry/mid-level
education, on-site supervisor education
Entrusted education from externalsources

2,619

876

（Reference）

FY 3/19
Total

Skilled staff education participants
increased as planned

2,522

129

318

1,029

3,047

1,344

1,322

104

167

299

292

28

22

3,809

7,690

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Basic maintenance education
participants increased significantly.
Course graduates assigned to
semiconductor manufacturing
companies where demand isincreasing

16

Other Businesses Business Revenue
Results of Other Businesses
FY 3/19 2Q
Results（Unit: Million yen/％）

FY 3/20 2Q% of Total

Results

Year-on-Year% of Total

Increase(Decrease)

仮数字

FY 3/19% Change

Full year

Net sales

1,208

100.0%

1,369

100.0%

161

13.4%

2,485

Expenses

1,351

111.8%

1,367

99.8%

16

1.2%

2,732

Operatingprofit (loss)(143)(11.8%)

2

0.2%

145

(247)

 Net sales increased due to increase in number of residents in Bldg. 6
 Other facilities (Bldg. 1 - 5) maintained high occupancy rates
 Aiming to achieve full year profitability through continued increase in Sweetpea Higashi Totsuka residents andpromotion of efforts to control expenses

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

residents
入居者数

300
297

96.4%
94.8%

297

100% 60

95.7%

96.4%

95%

30
20
10

280

90%
Sep '18-end Dec '18-end Mar '19-end Jun '19-end Sep '19-end

residents
入居者数

44

40

96.4%

33
21
22.3%

27
28.7%

Occupancy# of[Bldg.6] (capacity:94)

50

295

292

290

297

Occupancy

rate
入居率

46.8%

rate
入居率

48
51.0%

35.1%

0

0%
Sep '18-end Dec '18-end Mar '19-end Jun '19-end Sep '19-end

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved17

2Q Financial Results Summary
Consolidated Financial Results
Net Sales 36,797 Million yen（+12.2% year-on-year）

Operating Profit 1,128 Million yen

 Net sales YOY increase: 12.2% Annual progress rate: 46.0%
 Operating profit YOY increase: 23.2% Annual progress rate: 28.9%（+23.2% year-on-year）

Net Sales by Industry
Automobiles…+40.5%
Electronic devices…(3.2%)

 Automobiles industry is on increasing trend due to new orders, mainly from AccountCompany Group Electronic devices industry was affected by market after temporary recovery, partial
reduction in net sales

Quarter-end Number ofEnrolled Staff
14,639 staff（+597 from FY 3/19-end）…+1,102 staff in FY 3/19 2Q

 Although there was a decrease of enrolled staff in electronic components-relatedcompanies, overall enrollment increased due to high level demand from automobilesrelated companies

 Net increase of enrolled staff in 2Q decreased YOY
Net Sales per Capita/Monthly
394 Thousand yen(+3 Thousand yen from FY 3/19-end） Promoted assignment of skilled staff to high unit-cost production sites
 Unit-cost negotiations progressed as planned…+14 Thousand yen in FY 3/19 2Q
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18

1-2

Future Prospects

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19Future Market Trends
Overall

DemandEnvironment…The most recent effective opening-to-application ratio of jobs has declined
significantly, as represented by a decline in "production process occupations". As
in previous years, NISSO expects to increase personnel towards FY-end
Automobiles…With the introduction of new car models and increased production of high-end
models, domestic and overseas orders are expected to increase
Electronic devices …Due to the delay in the recovery period of orders at manufacturers, after the
decline in 1H, demand for 5G-related parts is expected to increase from FY-end
onwards

Recruiting
Environment

While the decline in the number of new job openings in the manufacturing industry is noticeable,
the degree of accuracy for matching with regards to NISSO's job openings is becoming increasingly
important
The number of personnel orders is expected to increase due to orders from the automobiles industry

ClientEnvironment

Demand for external human resources from client companies is expected to occur continuously inresponse to work-style reforms

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

20

NISSO's Response to the Spread of 5G

5G
Big
data

Connected cars
Autonomous
driving

Highperformance
smartphones

5G-compatible
base stations

IoT

Wearable
devices

Remote control
equipment

Memory※NISSO’s client companies
New factory launches（2020～）
・Semiconductor manufacturers
・Semiconductor manufacturing
equipment manufacturers
・Condenser・capacitor manufacturers

Lithium-ion
batteries※Each company is making significant investments

Condensers・
capacitors

NISSO's Response (Market Strategies)

Sensors

Manufacturing
equipment※Account Companies(automobiles, electrical machinery, electronic
components, precision equipment)
Promote assignment of skilled staff to increase
market share and business performance※Development of new clients
Actively develop new growth sectors, establish
firm position

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

21Topics
Creation of diverse employment opportunities
Notice of Collaboration with Nikon Corporation in the Human Resources Dispatching Business(announced September 13, 2019)
Through the collaboration as a joint venture company, NISSO and Nikon will join forces to promote the humanresources dispatching business, paid employment placement business, work contracting business, career development,
and the business related to human development education, etc.

【Overview of Joint Venture Company】
（１）

Name

Nikon Nisso Prime Corporation（２）

Location

Shin-Yokohama 214 Bldg. 8F, 2-14-2 Shin-Yokohama, Kohoku-ku, Yokohama, Kanagawa（３）

Representative

Masahiko Yoshida（４）

Description of Business

General Human Resources Services Business（５）

Capital50 Million JPY（６）Date of Establishment

November 7, 2003

（７）

Fiscal Year-end

March 31

（８）

Net Assets

388,942 Thousand JPY（As of the end of March 2019）（９）

Total Assets

983,348 Thousand JPY（As of the end of March 2019）（10）

Shareholding Ratio

Nikon Corporation: 51%, NISSO CORPORATION 49%

Joint Venture Business Start Date: January 6, 2020 (Scheduled)
Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

22Topics
New Graduate Chinese Engineers
Company entrance of 18 new graduate Chinese engineers
September After Japan arrival ～ Welcoming Ceremony, implemented new-hire education at
NISSO'S training facilities
October

Employed at NISSO's client companies

Initiatives for ESG Management～Nisso Group promotes the realization of workplaces where diverse human resources can flourish
and pursue fulfillment in their work～
Creation of an environment that makes it easier for people with disabilities to work (Nisso Pure)
Participation in "Abilympics (competition where people with disabilities compete for skills developed in their daily workplaces)"

17th Annual Kanagawa Skills Competition for Persons with Disabilities ～Abilympics Kanagawa 2019～

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved23

２. Earnings Forecast for FY 3/2020

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved24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

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FY 3/17

FY 3/18

FY 3/19

FY 3/20
Expected25

３. Shareholder Return Policy

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved26

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 and strengthening the corporate structurethat 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 Reserved27

４. Supplementary Materials

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved28

Consolidated Balance Sheet(Unit: Million yen,%)Mar. 2019-end

Sep. 2019-end

Amount% of Total

Amount% of Total

Increase(Decrease)

14,17467.4

13,262

66.3

(911)

Cash and deposits

5,633

26.8

4,510

22.5

(1,122)

Notes and accounts receivable - trade

7,757

36.9

7,962

39.8

205

6,844

32.6

6,748

33.7

(96)

4,942

23.5

4,903

24.5

(39)

359

1.7

400

2.0

40

1,542

7.3

1,444

7.2

(97)

Total assets

21,019100

20,011100(1,008)Current liabilities

9,161

43.6

8,028

40.1

(1,133)

Accrued expenses

4,751

22.6

4,592

23.0

(158)

Income taxes payable

742

3.5

517

2.6

(225)

Provision for bonuses

738

3.5

808

4.0

69

Non-current liabilities

1,312

6.2

1,301

6.5

(10)

750

3.6

692

3.5

(58)

Total liabilities

10,474

49.8

9,329

46.6

(1,144)

Shareholders' equity

10,53550.1

10,714

53.5

179

Total net assets

10,54450.2

10,681

53.4

136

Total liabilities and net assets

21,019100

20,011100(1,008)Current assets

Non-current assets
Property, plant and equipment

Intangible assets
Investments and other assets

Long-term loans payable

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

Point①Sale of shares
Non-current assets (investments andother assets) decreased due to the sale ofcross-shareholdings②Payment of taxes
Current liabilities decreased due to tax
payments for social insurance,
consumption tax, and (corporate) income
taxes③Overall
As a result of the above, cash anddeposits decreased, as well as current
assets and total assets

29

Quarterly Consolidated Statements of Cash Flows(Unit: Million yen,%)

FY 3/19
2Q YTDFY 3/20
2Q YTD

AmountAmountIncrease(Decrease)

Cash flows from operating
activities

351

(361)

(713)

Cash flows from investing
activities

(93)

24

118

Cash flows from financing
activities

(424)

(786)

(361)

Net increase (decrease) in cash
and cash equivalents(165)(1,122)(956)

Cash and cash equivalents at
beginning of period

5,283

5,633

349

Cash and cash equivalents at endof period

5,117

4,510

(606)

Point
① Cash flows from operating activities
While revenue from profit before income
taxes and allowances increased YOY,
expenditures for tax payments for social
insurance, consumption tax, and (corporate)income taxes increased YOY, resulting in
expenditures of 361 million yen.

② Cash flows from investing activities
While the amount of expenditures forinvestments related to core systems, etc.,
increased YOY, the sale of crossshareholdings generated revenue of 143
million yen, resulting in revenue whichamounted to 24 million yen.
③ Cash flows from financing activities
In addition to not procuring funds throughborrowings, as a result of a YOY increase individend payments, the amount ofexpenditures increased YOY, to 786 million
yen.

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved

30

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： http://www.nisso.co.jp/

Copyright ⓒ 2019 NISSO CORPORATION All Rights Reserved31