NISSO CORPORATION posted record-high 1Q net sales since our listing due
to an increase in the number of enrolled sta and higher billing unit-costs,
despite the continuing impact of parts shortages.
NISSO CORPORATION FY 3/2023 1Q Financial Results

NISSO CORPORATION

6569 · Prime Market · Servicess is a transcript of NISSO CORPORATION's ﬁnancial results for the ﬁrst quarter of the ﬁscal year
ending March 2023.

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yuichi Shimizu, Representative Director, President & CEO, NISSO CORPORATION

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ponsorNISSO CORPORATION

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Web i ettps://www.nisso.co.jp/en/h

CONTENTS

r. Ryuichi Shimizu

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Corporate Outline

This is the Corporate Outline.

xplain the review of the Medium-term Management Plan in line with theGroup Companies

This is a list of companies of the Nisso Group.

Signiﬁcance of Existence of the Nisso Groups page describes the signiﬁcance of existence of the Nisso Group. Aiming to become a humanresources company that responds to this new era, we would like to return to our starting point of“Nurturing and Bringing Out the Best in People,” our founding philosophy.
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Determination of the Nisso Groupxt is the determination of the Nisso Group. Although it states that the "Nisso Group will continue topromote reforms", the Nisso Group will transform in order to respond to changes in the social
environment and the challenges we face.
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Social Environment Awareness Society 5.0

xt is our social environment awareness. Aiming to support a society in which new values are
created, we would like to work on the sophistication of services and the development of humanresources by utilizing new technologies while focusing on Society 5.0.

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Story of Mission Achievement

s is our story of mission achievement. With the "creation of a comfortable workplace", "responding
to social and environmental changes", and "strengthening and awareness of governance" as key
challenges, we will make great e orts to "maximize employee and customer satisfaction," "provide
high value-added services," and "strengthen management structure and internal controls" to enhance
corporate value through the creation of social value.

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Progress of Consolidated Management Target Values

r phs on the slide show the progress of consolidated management target values. Despite the
COVID-19 pandemic, we were able to achieve the net sales target by meeting the strong demand forhuman resources from our clients. On the other hand, we were unable to achieve our proﬁt target as aresult of the signiﬁcant impact of reduced operations due to a shortage of semiconductors and various
supply chain issues.

The g a

Review of Key KPIs 1 (NISSO, Non-consolidated)s is a review of our key KPIs. NISSO is organic and has grown to a scale that exceeds that of the
pre-COVID-19 pandemic. We were also able to continue to acquire orders by strengthening businesswith major automobiles and electronic devices-related manufacturers. Furthermore, the transaction
scale of Account Companies has been steadily growing. This has also had a signiﬁcant impact onmarket share growth.
Thiv w of Key KPIs 2 (NISSO, Non-consolidated)

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ﬁrst graph on the slide indicates that increases in the number of Account Company assignments
and engineer enrollment, etc., has contributed to the increase in average unit-costs. Next, the numberof enrolled sta at the end of the FY increased by 1,799 from the end of the previous FY, and thenumber of enrolled engineers increased by 497 due to the promotion of conversion to engineers. In
addition, we have been able to decrease the turnover rate year by year.

The

Initiatives for FY 3/2023

rt t v s for FY 3/2022, ﬁrst of all, in "Expand the base of core areas", we made Vector
Shinwa a subsidiary. Next, in "Expand the business portfolio", we started o ering a new AI service
called " TASUKI Annotation". As for the creation of a new partnership, we established Leaf Nxt, a joint
venture company with TSUNAGU GROUP HOLDINGS, to make a mark in the HR Tech area.
Rega ding ini ia i e・t on, in "Enhance nursing care welfare services", we built a system for accepting foreign
caregivers last ﬁscal year and started accepting them in June 2022 to respond to the shortage ofIn addi iursing care sta . "Strengthen the management base" is as shown in the slide.

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Review of the Medium-term Management Plans page is about the review of our Medium-term Management Plan. As indicated by the red arrow in
the graph, we were greatly a ected by the COVID-19 pandemic. As a result, although the original
business plan was unfortunately pushed back one year, we will strive to catch up with this postponed
business plan and achieve net sales of 115 billion yen in the fourth year, which was originally planned
for the third year.
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Business Environment ･ Market Opportunities

will provide an explanation about our business environment and market opportunities. As shown on
the slide, although the decline in the labor force population is not a positive situation for us, on thecontrary, we believe that opportunities for the human resources market will expand in this situation.
The factors are listed on the slide. In each of these ﬁelds, we will develop human resources to promote
new human resources services and technologies.
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Image of the Nisso Group Growth Cycles is an image of the Nisso Group's growth cycle. Our approach is to ﬁrst raise customer/client
satisfaction (CS) with employee satisfaction (ES) as a starting point, realize shareholder satisfaction(SS), and further develop our business by collaborating closely with local communities and thegovernment. As you can see on the slide, the idea is that we will become a company that is suitable fora sustainable society and that we will also grow as a company.

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Management Strategies

ur management strategies consist of two pillars: "Business Strategy" and "Infrastructure
Strengthening Strategy". Our Business Portfolio Strategies, in particular, are to "combine 'deepening'of core areas and 'exploring' of new areas" and "promote high quality high value-added to core areabusiness domains", and we will continue to grow our business while implementing these strategies.
O・

Business Portfolio Strategy

ur Business Portfolio Strategy is as shown on the slide. Our current core is the "E ciency area" on
the bottom right of the slide. By further advancing our business and developing human resources, wewill take on the challenge of the next-generation core, the "Focus area” on the upper right.
O, as shown on the bottom left, there is the area of "Rebuild" within our business. By "rebuilding
services" and "developing new menus" here, we will transition to the "E ciency area" and "Future
potential" on the upper left to develop our business into the next generation.
Then

this "Future potential" will sow the seeds for the creation of new businesses, our approach is to"create and grow new businesses while leading them to the next core area". In addition, as I
mentioned earlier, although we may shift to the next core area through development, since the volume
of our business is extremely large, we believe that this is an area where we will increase e ciency andstrengthen our earning power.

Since

Provision of Services that Respond to Changing MONOZUKURI(Manufacturing)s page is about the provision of services that respond to changing MONOZUKURI. The
manufacturing industry has undergone a major change from the era of simply making hardware andselling it to customers. Under such circumstances, we must also transform our business model.
This shown in the slide, if the model is to increase customer/client satisfaction through services orexperiences in addition to providing tangible goods as in the past, we must naturally respond to newservices and high quality services that respond to new values for customers/clients, not just "how weAufacture". By doing so, we will further earn the trust of our customers/clients and expand ourbusiness.

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Strategies by Business (Initiatives by Group)s page is about our strategies by business (initiatives by group). The table on the slide shows how
our group companies respond to each business area.

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ome of the new initiatives are described in the table, but among them, we will place special emphasison the engineering area as a high value-added area.

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Practice of Human Capital Management

s page is about our practice of human capital management. This is one of our Infrastructure
Strengthening Strategies.

This shown in the slide, the basis of our management strategy is to operate a virtuous cycle in which weinvest ﬁrmly in human capital, expand earnings by providing high value-added services to our clients,
and then reinvest such expanded earnings back into human capital.

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Response to Human Resources Mobilitysow me to explain our response to human resources mobility, which is the second of ourInfrastructure Strengthening Strategies. We will discover and visualize the abilities of workers andcorporate needs, and achieve both human resources discovery and business opportunity expansion.
Plea e allr r development, we aim to further develop our strengths, complement areas where we arelacking, and place the right people in the right jobs. The concept is as illustrated in the diagram on theslide.
In ca ee

Realization of BX (Business Transformation) by Digitizing
Business Operations

s page is about the realization of BX (business transformation) by digitizing business operations,the third of our Infrastructure Strengthening Strategies.

Thiy promoting digitization, we will realize management based on data. We believe that byimplementing the speciﬁc measures described on the slide, we will be able to expand our businessand improve our earnings by improving the sophistication and quality of our business.

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Strengthening of Governanceourth of the Infrastructure Strengthening Strategies is the strengthening of governance. As shownon the slide, will strive to strengthen our management structure and internal controls by faithfully andconcretely carrying out activities based on the "Fundamentals of Governance", the "5 Principles ofGovernance", and "Promotion Measures".
The f

Consolidated Management Target Values①

s r quantitative target values. As shown on the slide, we are determined to achieve our target
values, despite the ongoing struggles due to the impact of COVID-19.

The e a e

Consolidated Management Target Values②s table shows our consolidated management target values. We will proceed with the idea ofachieving each of these items under our revised Medium-term Management Plan.

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Summaryxt, let me explain our ﬁnancial results. The summary is as shown on the slide. I will explain each of
the points later.

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FY 3/2023 1Q Consolidated Financial Results Highlights

s for the consolidated ﬁnancial results highlights for the ﬁrst quarter, since they were greatly
inﬂuenced by NISSO, I will talk about it in detail in the explanation about NISSO later on.

AFY 3/2023 1Q Non-consolidated Financial Results Highlights

t sales increased by 13.6% year-on-year due to an increase in the number of enrolled sta and anincrease in unit-costs. In addition, comparing the enrollment at the end of the same period in June,
there were 13,856 enrolled sta in the previous ﬁscal year and 15,270 enrolled sta in the current
ﬁscal year, an increase of 1,414 enrolled sta

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proﬁts, we were strongly a ected by the signiﬁcant decrease in operating hours due to theshortage of semiconductors and major logistical problems in the supply chain caused by lockdowns in
China.
Rega dingthe other hand, demand from clients were very strong, not only in the automobiles industry, butalso in the semiconductor industry in particular. Therefore, we plan to continue to further increase thenumber of enrolled sta , and will incur some costs, mainly recruiting expenses, in the future as well.
On

FY 3/2023 1Q Quarterly Non-consolidated Financial Results

s refer to the graphs on the slide. Compared to the ﬁrst quarter of last year, it seems that proﬁts
have dropped signiﬁcantly. However, in the ﬁrst quarter of last year, since supply chain problems
caused by COVID-19 had settled down, the operation rate was relatively high, and a proﬁt of 482
million yen was generated. On the other hand, this year, unfortunately, it was 263 million yen,showing a year-on-year increase in revenue and a decrease in proﬁts.
Plea eFY 3/2023 1Q Financial Results Summary

s is our ﬁnancial results summary for the ﬁrst quarter of FY 3/2023. I will provide an explanationfor each of the sections hereafter.

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FY 3/2023 1Q Net Sales by Industry (NISSO, Nonconsolidated)s shown on the slide, the electronic devices industry made the most progress in the ﬁrst quartercompared to last year, up 16.8% year-on-year. This was followed with a year-on-year increase of
14.2% in the automobiles industry. As you can see, the net sales composition ratio of each industry
has also risen.
Ar
the precision and electrical machinery industry, although net sales increased by 6.7%, theproduction situation remained almost ﬂat.
Rega dingrRega dingthe electronic devices industry, these results indicate that demand for semiconductors were

xtremely strong and has expanded signiﬁcantly, and operating conditions have remained at a
relatively high level.

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the automobiles industry, although sales should have increased even more, due to theimpact of the supply chain and other factors, operating conditions were not favorable. Among them,
the increase in the number of enrolled sta and the increase in unit-costs have led to these results.

Rega ding

FY 3/2023 Quarterly Net Sales by Industry (NISSO, Nonconsolidated)s you can see in the graph of quarterly net sales by industry, while the electronic components
industry continues to set record highs, although the number of enrolled sta
in the automobilesrelated industry has grown, operations have not been favorable and has not yet reached the level torenew record highs.
A

Account Companies (NISSO, Non-consolidated)s page reﬂects the net sales of the Account Company Groups. Although net sales in the ﬁrst quarterreached a record high since NISSO's listing, sales have not increased su ciently compared to thesecond, third, and fourth quarters of the previous ﬁscal year. As I mentioned earlier, this is due to thefact that operating conditions in the automobiles-related industry were not necessarily favorable.
Thiso, one cause for concern I would like to mention here is the impact of the so-called semiconductor
shortage on the telecommunications equipment sector, including mobile devices. Since production
was unfavorable at our business partners who manufacture passive components, or capacitors, wewill continue to monitor future trends in this regard.

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Net Sales per Capita (NISSO, Non-consolidated)s described on the slide, compared to last year, it may appear that "net sales per capita haveincreased by 2,000 yen per month, but in fact, operating conditions were not as good as last year. At
the unit-cost level, the simple average of the hourly rate per capita has increased by about 100 yen,A

which pushed up monthly sales per capita, which means that sales will seemingly grow even morewhen operations return to original levels.

Number of Enrolled Sta (NISSO, Non-consolidated)s page is about the trends in the number of enrolled sta . As indicated on the slide, the number ofenrolled sta
increased by 325 from the end of the previous ﬁscal year, an increase of 1,414
compared to the ﬁrst quarter of the previous year. Although it is becoming very dicult to hire sta ,the fact that we have been able to hire as planned and that we have been able to keep turnover rates
under control have led to the continued increase in the number of enrolled sta .

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Educational Achievements (NISSO, Non-consolidated)

①

xt, I would like to explain about our educational achievements. As shown in "Point " and "Point" on the slide, in order to actively increase the number of sta who change their careers toengineers, we have established a system to train signiﬁcantly more engineers compared to last year.
Ne②

t on, regarding education of equipment maintenance, which is in high demand, we havetraditionally conducted classroom learning and practical skills training together. However, the numberof participants in the ﬁrst quarter shows that e ciency has improved by establishing a system toconduct classroom learning outside the Technical Centers, where practical skills training is conducted.
Inaddi iNet Sales by Segment (Services)・s page is about net sales by segment. These graphs show Manufacturing Production, Engineer,
Administrative, and O ther in the General Human Resources Services Business, and Nursing Care
Welfare in O ther Businesses.

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Manufacturing・Production Human Resources Services

・・

trends of net sales and the number of enrolled sta in the Manufacturing Production Human
Resources Services are shown here. As shown on the slide, net sales increased by 1.904 million yen,or 12.3%, compared to last year. The number of enrolled sta increased by 1,123 compared to lastyear. It is our belief that we will continue to respond to the steady human needs of our clients andcontinue to grow in the future.

The

Manufacturing・Production Human Resources Services

・s is page is about the net sales per capita for the Manufacturing Production Human Resources
Services. Net sales per capita increased by 1.3% year-on-year. Despite the low operating hours per
capita, unit-costs have increased more than enough to o set them, and you can see that net sales per
capita have increased as a result.

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so been able to maintain the turnover rate below 4%. In the future, we believe that byfurther increasing either the ratio of skilled sta
or engineers, we will be able to reduce the overallturnover rate.
We ha e alEngineering Human Resources Services

xt, I would like to explain about our Engineering Human Resources Services. As shown in the graphon the slide, net sales increased by 572 million yen, or 46.1%, compared to the previous ﬁscal year.
This result is due to the extremely high customer needs, especially for equipment maintenance, andthe fact that we have been gradually increasing our training capabilities, which has been an issue forNe

us. The number of enrolled engineers has also increased by 378 compared to last year.

Engineering Human Resources Services

s page is about the net sales per capita for engineers. Although net sales per capita were down,
due to a slight decrease in operating hours and because we have increased the number of engineers
signiﬁcantly, the fact that there are still a large number of people with beginner-level skills has pushed
down overall net sales.
Thiturnover rate of engineers is slightly higher than the previous ﬁscal year, which is unavoidable tosome extent due to our strategy of increasing the number of enrolled engineers. However, whilefurther continuing to improve our training structure, we would like to reduce the turnover rate to lessthan 2%, which we have been aiming for thus far.

The

Administrative・Other Human Resources Services

・s page is about our Administrative Other Human Resources Services. Nisso Brain Co., Ltd. playsa central role in this segment. However, since general administrative work faces a dicult future, weare considering expanding into ﬁelds that can replace this one, such as the annotation ﬁeld that I
explained earlier, where we expect needs to increase in the future. Please refer to the details later atyour own convenience.

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Nursing Care・Welfare Services

・s page is about our Nursing Care Welfare Services. As you can see on the slide, the occupancy
rate was 91.8% compared to 93.3% in the ﬁrst quarter of last year. The result shows that theoccupancy rate has decreased slightly due to the impact of the COVID-19 and other factors.
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FY 3/2023 Full-year Consolidated Forecasts

would like to leave our consolidated forecasts unchanged as previously explained. It's quitepossible that these numbers could change depending on what happens in the future after COVID-19.
However, at the moment, we do not believe that all risk factors have been eliminated yet, so we would
like to leave these ﬁgures unchanged and disclose information in a timely manner in the event that thesituation changes.

We

Shareholder Return Policy

s is our Shareholder Return Policy. As you can see on the slide, the graph appears to be on asteady downward decline. However, we are aiming for a dividend payout ratio of 30% or more, andtaking into consideration the ﬁgures at the end of the ﬁscal year, we will leave it unchanged at 16 yen,which is 30.2%. All of our employees will work together to increase our proﬁts as much as possible,
and strive to return the dividend to 18 yen as in the previous ﬁscal year.
Thit is all for now. Thank you very much for your undivided attention.

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