Q&A at the Briefing of the Financial Results of the 1st Quarter Ended
June 30, 2023
Questioner 1:
You said that the first quarter performance was as forecast. However, BPO SBU
was affected by a decrease in COVID-19-related projects. In addition, profit also
declined at Technology SBU. Please let me confirm if it was acceptable to startwith a profit decline in the first quarter at all. Did you plan to make additional
investments like these, etc. in the first half? I believe that many of theinvestments were made on a project-by-project basis. I would like to ask you tocomment about the situation of carry-over and such like.
CFO Tokunaga:
I believe that you are asking whether the Q1 results of BPO SBU and Technology
SBU were good or not as compared to the full-year forecasts. The results of eachwere above our internal forecasts.
Specifically, Technology SBU has recruited 481 new employees. Moving forward,
training of these employees will begin to be completed in Q2, resulting in sales
posted at customers. So on this point as well, we are not concerned. In addition,
at engineering as one of sub-segments, the amount of outsourced work had been
apt to increase or be concentrated in Q3 and Q4. Therefore, the Q1 results arein line with the forecasts as of the beginning of the fiscal year.
Further, regarding BPO SBU, because the COVID-19 pandemic has subsided
recently, the decreases in revenue and profit from COVID-19-related projects inQ1 were exactly as expected. At the beginning of the fiscal year, we alreadyassumed that revenue and profit from these projects would be almost zero fromQ2 onward. On the other hand, since the beginning, we have naturally been
considering shifting our internal resources for COVID-19-related work to otherbusinesses during Q2 to Q3. We therefore believe that progress is being made asplanned.
CEO Wada:
In a way, this Q1 profit decline at Technology SBU is a very good form of decline.
This is evidence that we have secured resources, including our salespeople.
Conversely, you could conclude that unless the Q1 result is at this level, wecannot expect growth in the second half.

Questioner 1:
Thank you very much. I think that the parts of BPO SBU other than COVID-19related projects also started with a decline in profit. Could you also explain thispoint?
CEO Wada:
As Mr. Tokunaga told you just now, businesses in the private sector other than
COVID-19-related projects have remained firm. In addition, BPO SBU has also
hired new employees, and as at Technology SBU, the addition of the newworkforce will begin to enable billing after a certain period. Given this structure,
we do not believe that there is reason for concern here either.
Questioner 2:
I feel that Career SBU was very strong, with sales from the placement businesshaving increased 35% in the Apr-Jun quarter. I would like to ask you to provide
a little more detail about this point, including the situation of the placement
industry, the external environment, your hiring situation, and productivity. Pleasealso explain about the financial forecasts for Q2 and thereafter.
CFO Tokunaga:
Data on job-openings-to-applicants ratio of “doda” are presented on page 50 of
the presentation slides. At present, the job-openings-to-applicants ratio is tightat 2.26, and demand from corporate customers remains as strong as ever. To
respond to this demand, we must first have more individuals registered in our"doda" database and then increase the number of consultants to cater to theneeds of the individuals. We believe that these two initiatives are highly importantfor our revenue increase. The number of registrants in the database is increasing
steadily at present, and more than anything, the number of consultants has
increased from slightly more than 1,600 to slightly more than 2,100. In addition,
productivity has improved by 5%. Thus, the expansion of both the database andthe number of consultants for tapping into this huge demand has been going well.
This has probably contributed to the 30% increase in sales, according to ourinternal analysis.

CEO Wada:
Regarding job offers, the number of job offers posted on the "doda" media has
been increasing significantly and remained firm. In addition, we have seen nosigns at all about the anticipation of an economic slowdown in the coming fall
and thereafter, which used to be an issue of concern. Companies thus remain
motivated to recruit human resources. Accordingly, we believe that we will beable to keep this business strong in the second half.
Questioner 2:
I have a question about the point that productivity did not decline. You said that
productivity did not decline while you increased the number of consultants andcareer advisors. Does this mean that the demand is that strong or that yourinternal initiatives including human resource development have been goingsteadily and successfully? Please explain the background.
CEO Wada:
We may sound a little like we're patting ourselves on the back, but we believe
this is evidence that we have been quite successful in building a human resource
development system, which combines and harmonizes well with systematization,
including the division of work as well as human resource utilization.
Questioner 3:
Please tell me about Staffing SBU.
While the number of active staff is increasing steadily at present, the number oforders that you presented as market data seemed to be on a slightly weak notecompared to the previous quarter. Could you explain this point?
Mainly, I have the impression that the top line has gradually been growing weakerat staffing companies in the United States and Europe, so I want to confirm.
CFO Tokunaga:
As shown in the middle of the bottom row on page 21 of the presentation
slides, the number of orders decreased 5.1% year on year while the number ofcontract terminations also decreased. In addition, as shown in the somewhat
small text at right, the number of active staff is 120,000 and has remained at
this level. At present we do not forecast in particular that this number of active
staff will decrease. This is our understanding.

CEO Wada:
We do not see signs of a market slowdown. In relation to our future acquisitionof human resources, we have strategically changed the direction toward reducing
the number of terminations further. We used hours of labor for this purpose,
which has resulted in the slight year-on-year decline in the number of orders.
This is the background. At the same time, because the number of orders
themselves and the level of the number of confirmed contracts itself have been
rising, we are working to enhance productivity in existing contracts.
Accordingly, we would like you to understand that the result does not reflect achange in the market.