Quick : Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31,2022

QUICK CO., LTD. (4318) Financial Results for the First Quarter of FY3/22

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

During the first three months of the fiscal year ending March 31, 2022, the Japanese economy continued facing a tough situation due primarily to the third state of emergency declared in April 2021 in response to the spread of COVID-19 infections, which restricted consumer spending and economic activities again. Although vaccination has started also in Japan, the economic outlook remains uncertain as an end of infection spread can still hardly be foreseeable due to the impact of variants, which led to the fourth state of emergency declaration in July 2021.

Meanwhile, in Japan's labor market, the seasonally adjusted job openings-to-applicants ratio was 1.09 and the seasonally adjusted unemployment rate was 3.0% in May 2021, suggesting that a moderate recovery trend is observed, though seesawing since October 2020.

Under such business environment, the Group worked on differentiating the QUICK Group from competitors and increasing customer satisfaction by helping our client companies to solve their HR related problems by expanding operations in new strategic market sectors and strengthening coordination between the group companies. Furthermore, the Group strengthened the business base by restructuring the sales structure in order to boost the performance.

Net sales increased 14.2% year-on-year to 7,053 million yen, operating profit increased 28.3% year-on-year to 2,470 million yen, ordinary profit increased 28.7% year-on-year to 2,488 million yen, and profit attributable to owners of parent increased 27.5% year-on-year to 1,758 million yen.

Beginning with the first quarter of the fiscal year ending March 31, 2022, the Company has applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and other pronouncements (hereinafter collectively, the "Accounting Standards"). In applying the Accounting Standards, the new accounting policy was retrospectively applied for every prior accounting period in accordance with the principle-based treatment provided in Paragraph 84 of Accounting Standard for Revenue Recognition. Therefore, comparisons and analysis were made using the figures that were adjusted reflecting the retrospective application of the Accounting Standards.

Performance of the business segments is described as follows.

(Human Resources Services Business)

1) Personnel Placement

In the personnel placement category, an increasing number of companies such as those in construction and automobile industries have been enhancing their hiring activities, looking ahead after corona, in addition to those in semiconductor industry that was showing a vigorous recruiting needs even in the midst of the COVID-19. Furthermore, as COVID-19 have overwhelmed the medical system, demand for temporally staffing for nurses remained at a high level. Given this business environment, the personnel placement business for construction and pharmaceutical related categories as well as various types of engineers for specific fields grew favorably, and the nurses placement category remained solid. Those were the major results of our efforts including focusing on selected categories and providing an extensive support of having more meetings with our client companies and registrants who wish to change careers.

2) Temporary Staffing, Temporary-to-Permanent Staffing, and Business Contracting

In the temporary staffing, temporary-to-permanent staffing and business contracting categories, in addition to lasting strong hiring needs for nurses at medical and welfare category, a special demand for vaccination staff primarily contributed to steady performance of temporary staffing of nurses. Meanwhile, the temporary staffing of childcare workers expanded the performance for the fiscal year, thanks to limited temporary closure at client companies' facilities, though the number of workdays of temporary staff decreased dramatically in the preceding fiscal year, which was mainly caused by temporary closure at client companies' facilities, and voluntary or mandatory absence from work of temporary staff as a result of the first state of emergency declaration.

Overall, sales of the Human Resources Service Business increased 11.4% year-on-year to 5,304 million yen and operating profit also increased 11.2% year-on-year to 2,377 million yen.

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QUICK CO., LTD. (4318) Financial Results for the First Quarter of FY3/22

(Recruiting Business)

In the Recruiting Business, the new college graduate category saw a rigid performance in the volume of advertisements in our recruitment websites targeting March 2022 new college graduates and our internship websites for March 2023 new college graduates, as client companies' recruiting needs for new graduates recovered gradually.

On the other hand, in the mid-career hiring category, hiring needs in restaurant and other service businesses that were impacted by the third state of emergency declaration declined again, and also some temporary staffing companies restrained placement of recruiting advertisement in preparation for "post-state of emergency declaration." Primarily underpinned by strong recruitment needs in the fields such as medical/nursing care and logistics amidst the COVID-19 as well as other categories in which recruiting needs are recovering, the volume of "Indeed" business remained favorable and the volume of recruiting advertisements for full-time employees and part-time workers made a significant increase.

Services other than the handling of recruiting advertisement also posted a higher revenue. This was thanks to the addition of support services for recruiting activities of client companies mainly by offering a consultation on new graduate recruiting strategy during the COVID-19 pandemic as well as proposing online internship programs through Jump Co., Ltd., which joined the Group in June 2020.

Overall, sales of the Recruiting Business increased 59.0% year-on-year to 560 million yen and operating profit was 53 million yen, compared with a loss of 139 million yen in the same period of the previous fiscal year.

(Information Publishing Business)

In the Information Publishing Business, the sales promotion as well as recruiting sentiment of our client companies did not suffer such a serious deterioration experienced after the first state of emergency declaration in April 2020, although quasi-emergency measures were implemented in Ishikawa prefecture in May 2021. As a result, our mainstay lifestyle information magazines, a home information magazine "Iezukuri Navi" in Hokuriku district and "Indeed" achieved a significant sales increase.

Additionally, posting services including flyers distributed to households with lifestyle information magazines made a favorable growth, presently little affected by COVID-19 pandemic, and thereby enjoying stable sales promotion needs by the current customers. Furthermore, the concierge services we operate under the "cococolor" brand also achieved sales increase in all categories of career change, housing and bridal.

Overall, sales of the Information Publishing Business increased 28.4% year-on-year to 518 million yen and operating profit was 67 million yen, compared with a loss of 1 million yen in the same period of the previous fiscal year.

(IT and Internet-Related Business)

In the IT & Internet-Related Business category, "Nihon no Jinjibu (Japan's Human Resources Department)" related service, a total information site pertaining to personnel and labor, had the membership of exceeding 200,000 full-time human resources professionals, and its advertising revenues increased thanks to enhanced advertisement effects such as increased matches between the advertisements in the website and the users' requirements. Furthermore, the online HR related event, "Nihon no Jinjibu HR Conference 2021-Spring-," held in May 2021 hit a record high in the revenue, in addition to number of exhibiters and participants against a backdrop of its high recognition, advertising appeal and high level of satisfaction as a HR related event, which contributed to revenue increase of "Nihon no Jinjibu (Japan's Human Resources Department)" related services.

As for the system development category, with occurrence of shelving, postponement and cancellation of development projects that were impacted by the COVID-19 pandemic, the business environment has not recovered to the level of that before the COVID-19 pandemic yet. Even in such situation, the business performance expanded steadily as a result of focusing on reinforcing sales activities to both new and current customers, receiving new orders including AI-related projects as well as additional developments of the ongoing projects from the current customers. The learning field, on the other hand, posted decreased sales as considerable number of companies are still restraining IT-related investments. Although the Company worked on holding trainings and seminars in the forms of in person group training, online training and a hybrid one, combining both

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QUICK CO., LTD. (4318) Financial Results for the First Quarter of FY3/22

types, depending on the clients' need as well as reinforcing receiving orders for a training program designed for each client.

Overall, sales of the IT and Internet-Related Business increased 5.4% year-on-year to 460 million yen and operating profit also increased 20.2% year-on-year to 185 million yen.

(Overseas Business)

In the Overseas Business, North and Central America (notably in the U.S. and Mexico), personnel placement business remained resilient, as hiring needs for positions like IT specialists or experienced personnel turned to an improving trend, enjoying recovery of economic environment in the U.S., thanks to the progressed vaccination rollout. Meanwhile, temporary staffing business struggled primarily due to the contract period expiration in specific job categories as well as delay in hiring needs recovery for general office work. In Mexico, while hiring needs for interpreters, salespeople and individuals for general office work started to increase, sales decreased because the number of people including Japanese who wish to travel to Mexico decreased, which made it difficult to match the skills of job seekers with the needs of companies that have openings.

As for business in Asia (notably in China, Vietnam, and Thailand), China saw a start of declining trend in people's mind for job change due to corporations' restricted hiring activities that was caused by the behavioral limitations imposed by the government in association with the COVID-19 infection increase before Chinese New Year. The personnel placement business, however, had a significant sales increase, being successful in strengthening sales activities toward corporations that resumed hiring activities in the latter half of the preceding fiscal year. Personnel and labor consulting also performed well. Thanks to our fine responses to the clients in respect of business operation as well as labor management method amid the COVID-19 pandemic, we were able to build a rapport with the clients, which contributed to receiving orders for services other than consulting and advisory services such as visa application services and education/ training services, etc. On the other hand in Vietnam, we are still facing severe business environment due to continuing measures including overseas travel restrictions. In such circumstance, the results improved primary due to the cases where the orders were confirmed in the preceding fiscal year, while the employees actual entrances to the companies took place in the current fiscal year after they passed quarantine period. Also in Thailand, personnel placement business achieved growth, though domestic economy as well as corporations' hiring needs being stagnant that was impacted by the spread of the COVID-19. In addition to strengthening sales activities toward local Japanese companies, we worked on tapping Chinese and Taiwanese companies as well as those of the US or European countries and even Thai local companies that remained proactive in investment activities amidst the COVID-19 pandemic.

In the U.K., domestic personnel placement services as well as temporary staffing services had a sales decrease, but began to improve as a result of continuously growing hiring needs that was caused by substantial decrease in the number of infection toward the end of the first quarter, thanks to the third lockdown in response to the spread of COVID-19.

The Company's Global Business Division also give sales supports to overseas companies and worked on promoting the international career change supports (Cross Border Recruitment services) to attract more local registrants who want to change careers, and supporting other activities.

Overall, sales of the Other Businesses decreased 6.0% year-on-year to 209 million yen and operating profit was 5 million yen, compared with a loss of 14 million yen in the same period of the previous fiscal year.

(2) Explanation of Financial Position

Total assets at the end of the first quarter of the fiscal year under review were 16,001 million yen, which was 897 million yen more than at the end of the previous fiscal year. This was mainly the result of increases in cash and deposits and notes and accounts receivable-trade.

Total liabilities were 4,006 million yen, which was 410 million yen less than at the end of the previous fiscal year. This was mainly the result of a decrease in provision for bonuses despite an increase in income taxes payable.

Total net assets were 11,995 million yen, which was 1,307 million yen more than at the end of the previous fiscal year. This was mainly the result of an increase in retained earnings due to the booking of profit attributable to owners of parent. The shareholders' equity ratio improved 4.3 percentage points from the end of the previous

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