Earnings volatility from customer production cuts, price competition and long-term employment

「The automotive area recorded lower sales due to a decline in the number of technical employees, while the semiconductor area, where demand is strong, absorbed the impact and drove higher sales.」

「During the fiscal year, the outlook remained uncertain due to the impact of U.S. tariff policies and other factors, and demand for personnel remained weak.」

「Operating profit and EBITDA fell below the levels of the same period of the previous year due to higher recruitment expenses resulting from deteriorating recruitment efficiency caused by delays in responding to increasingly diverse needs, the expansion of low-profitability projects in the Vietnam business, and the impact of selling the Engineering business, which had a high operating margin.」

「In the automotive-related sector, demand for additional personnel was weak due to production adjustments at some automotive manufacturers. Although we intensified sales activities to secure demand for personnel not linked to production fluctuations, these efforts were insufficient to offset the aforementioned impact.」

「In the fiscal year, demand for personnel in manufacturing stagnated. Demand among automotive manufacturers began to recover in the second half, but this was insufficient to offset the impact of persistently weak full-year demand among semiconductor manufacturing equipment and semiconductor companies, resulting in lower revenue.」

「Revenue declined in the cumulative third quarter due to weak demand for personnel, particularly among semiconductor manufacturing equipment and semiconductor companies, amid stagnating demand for personnel in manufacturing.」

「Revenue declined as demand for personnel in manufacturing stagnated, particularly among semiconductor manufacturing equipment and semiconductor companies.」

「In the industrial and business machinery-related and electronics-related sectors, the effects of semiconductor inventory adjustments and other factors continued from around the autumn of the previous year. In the transportation equipment-related sector, production activity at automotive manufacturers was beginning to recover as the impact of parts shortages eased. However, following production adjustments at some manufacturers, demand for personnel remained generally weak, and recruitment activity was therefore curtailed.」

「In the Industrial and Business Machinery-related and Electronics-related fields, the company pursued cautious recruitment in light of customer conditions, including the postponement of new staffing demand and the decision not to fill vacancies since around the start of autumn against a backdrop of semiconductor inventory adjustments and other factors.」

「In the Industrial and Business Machinery and Electronics-related fields, the company pursued cautious recruitment in light of customer conditions, including the postponement of new staffing demand since around the start of autumn against a backdrop of semiconductor inventory adjustments and other factors.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「Regarding the environment surrounding the Group, some major automakers made production adjustments due to parts shortages caused by lockdowns in ASEAN countries and the global semiconductor shortage. However, demand for finished vehicles remained strong, and with production normalization expected, demand for personnel remained solid.」

「In the automotive-related sector, some major automakers made production adjustments due to parts shortages caused by lockdowns in ASEAN countries and the global semiconductor shortage. However, demand for finished vehicles remained strong, and with production normalization expected, there was no discernible impact such as a decline in demand for personnel.」

「In the automotive-related sector, some major automakers made production adjustments due to parts shortages caused by lockdowns in ASEAN countries. However, demand for finished vehicles remained strong, and early normalization of production was expected. As a result, there was no discernible impact such as a decline in demand for personnel.」

「In the first half of 2020, mainly among major automakers, temporary production stoppages caused by COVID-19 had an impact. From the second half of 2020, however, the situation reversed, and demand for personnel increased alongside a rapid recovery in production activity.」

「In the Manufacturing business, conditions such as temporary factory shutdowns and reductions in dispatched-worker numbers in the automotive-related sector, which was most heavily affected by the spread of COVID-19, eased. Demand for personnel recovered strongly as production activity recovered.」

「However, overall production activity has not yet fully recovered, and the number of technical employees declined because hiring was restrained. The automotive-related field was a major factor, as demand for personnel shifted sharply from the strong growth seen in the same period of the previous year ahead of the consumption tax increase, resulting in lower revenue.」

「In the automotive-related sector, which was heavily affected by the spread of COVID-19, revenue declined as supply-chain disruptions, weaker automotive demand and other factors led to more customers temporarily suspending factory operations or reducing the number of dispatched workers.」

「Meanwhile, in the semiconductor and electronic components fields, there were signs that production adjustments at some customers were reaching a bottom, but the trend toward workforce reductions continued, and the number of technical employees declined from the previous fiscal year.」

「Meanwhile, in the semiconductor and electronic components fields, there were signs that production adjustments at some customers were reaching a bottom, but the trend toward workforce reductions continued, and the number of technical employees declined from the previous fiscal year.」

「In the semiconductor and electronic components sectors, production adjustments at some customers, including semiconductor manufacturing equipment companies, have continued since January 2019. Some factories have consequently reduced their workforces, and demand for personnel has varied depending on industry and individual company conditions.」

「During the nine-month consolidated period, there were no new business or other risks, and no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「Accordingly, trends include a decline in the volume of contracts with the Group companies due to production cuts by customer domestic manufacturers and intensifying price competition with other companies in the same industry.」

「However, because the Group generally maintains long-term employment, if the reassignment of technical employees does not proceed smoothly, they may become idle employees, potentially placing pressure on the Group companies' earnings. In addition, if the volume of contracted work increases sharply, the burden of recruiting technical employees, which is incurred ahead of any increase in revenue, may have a significant impact and adversely affect earnings for the period.」