Pasona : Consolidated Financial Report FY2023 (June 1, 2023 to May 31, 2024) Three Months Ended August 31, 2023

Note:This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

October 13, 2023

CONSOLIDATED FINANCIAL REPORT (Japanese GAAP)

FY2023 (June 1, 2023 to May 31, 2024)

Three Months Ended August 31, 2023

For further information contact: Yuko Nakase, Senior Managing Executive Officer and CFO Tel. +81-3-6734-0200

Scheduled filing date of quarterly report: October 16, 2023

Supplemental materials prepared for quarterly financial results: Yes

Holding of quarterly financial results meeting: No

(All amounts are in millions of yen rounded down unless otherwise stated)

1. CONSOLIDATED BUSINESS RESULTS

1. Consolidated Financial Results

Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.

(2) Consolidated Financial Position

(Note) In total assets as of May 31, 2023 and August 31, 2023, temporary "Deposits received" from customers related to contracted projects is recorded in liabilities, and "Cash and deposits" worth it is recorded in assets. For details, please refer to "1. Information Concerning Quarterly Consolidated Business Results (2) Overview of Consolidated Financial Position".

2. DIVIDENDS PER SHARE

(Note) Revision to dividend forecast in the current quarter: None

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Consolidated Financial Report

Three Months Ended August 31, 2023

INDEX

1. Qualitative Information Concerning Quarterly Consolidated Business Results

1. Overview of Consolidated Business Results

i) Business Results for the First Quarter ended August 31, 2023

During the first quarter of the consolidated fiscal year under review, the Japanese economy experienced a moderate recovery due to a pickup in personal consumption and improved employment conditions. On the other hand, the economic outlook remained uncertain due to global monetary tightening and rising prices, etc. In addition, the shift of the COVID-19 infection to Class 5 has stimulated domestic human flow and increased inbound demand.

Amid this environment, the Group's key strategies for the fiscal year under review are "1) Evolving into X- Tech BPO" in the BPO domain, where demand is growing; "2) Expanding support for diverse work styles and career development" in the labor market, where work styles are diversifying; and "3) Expanding earnings from local development projects centered on Awaji Island" in the tourism domain, where post- COVID-19 revitalization is underway. We are working to solve various social issues through our business activities.

During the three months ended August 31, 2023, while BPO services grew from the same period of the previous year on the back of solid demand growth, expert services and outsourcing sales declined from the same period of the previous year due to a decrease in demand mainly related to measures against the COVID- 19 infection that occurred in the same period of the previous year.

As a result, consolidated net sales for the first quarter of the current fiscal year totaled ¥89,881 million (down 2.4% year-on-year), with gross profit of ¥21,226 million (down 4.7% year-on-year). SG&A expenses were ¥18,997 million (up 0.3% year-on-year), the same level as the previous year, due mainly to an increase in personnel expenses in line with business growth in BPO services, despite the absence of double rent associated with the office relocation to "PASONA SQUARE" in Minami Aoyama, Tokyo, which took place in the same period last year. Operating profit was ¥2,228 million (down 33.1% year-on-year), and ordinary profit was ¥2,197 million (down 39.2% year-on-year). Profit attributable to owners of the parent amounted to ¥187 million (down 85.5% year-on-year). Although the decrease appears large due to the fact that there was a gain on change in equity resulting from the listing of a subsidiary accounted for via the equity method in the same period of the previous fiscal year, the current year's plan is generally in line with the plan.

3M FY2023 Consolidated Financial Report

(June 1, 2023 - August 31, 2023)

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ⅱ) Business Segment Information (before elimination of intersegment transactions)

HR Solutions

Expert Services (Temporary staffing), BPO Services (Contracting and outsourcing), etc.

Net sales ¥75,122 million Operating profit ¥3,100 million

[Expert Services] Net sales: ¥34,551 million

In this segment, the Group provides expert services (temporary staffing) for a wide range of job types and generations, from office work to highly specialized skilled personnel, engineers, sales and marketing personnel, and from young people to senior citizens.

During the first quarter of the current fiscal year, demand for temporary staffing services remained firm amid the continuing moderate economic recovery, but net sales declined 8.7% year-on-year to ¥34,551 million as work related to the nationwide response in Japan to the COVID-19 infection, which had expanded in the previous fiscal year, was largely completed. During the period under review, the Company focused on expanding orders for high-level clerical positions, which require specialized knowledge and experience among clerical positions, and focused on reskilling temporary staff.

[BPO Services] Net sales: ¥35,840 million

In this segment, the Group provides BPO services by contracting reception, sales administration, order receipt and placement, human resources, labor, and payroll, as well as general affairs that consolidate and streamline complicated clerical work for customers and accounting and finance services that handle expense reimbursement according to busy schedules. Bewith, Inc., a consolidated subsidiary, provides contact center and BPO services utilizing self-developed digital technology.

Although there was a decrease in the number of projects that had been in special demand until the previous year, such as work related to COVID-19 infections, new demand was captured by both private companies and the public sector, resulting in sales growth over the same period last year. In the private sector, demand expanded for BPO services to help employees focus on core tasks and improve productivity in areas such as accounting and reception, contact center operations to respond to consumer inquiries, and X-TECH BPO, as well as demand from the public sector for recurrent education and employment support services.

As a result, net sales amounted to ¥35,840 million (up 6.0% year-on-year).

In this segment, we provide consulting and management support by professional human resources such as freelancers and former executives of listed companies, as well as education and training services commissioned by companies and the public sector, and HR tech implementation support services such as talent management. The company also provides education and training services commissioned by companies and the public sector, as well as HR tech implementation support services such as talent management.

In the advisory consulting business, the need for sales support personnel directly related to management strategies increased. In the recruiting business, recruitment consulting services continued to expand in response to corporate labor shortages, and the service menu was expanded. In the education and training business, demand for customer service operations training and other training increased as the flow of people became more active post-COVID-19.

As a result, net sales amounted to ¥2,183 million (up 8.0% year-on-year).

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