Pasona : CONSOLIDATED FINANCIAL REPORT (Japanese GAAP) FY2021 (June 1, 2021 to May 31, 2022) Nine Months Ended February 28, 2022

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.

April 14, 2022

CONSOLIDATED FINANCIAL REPORT (Japanese GAAP)

FY2021 (June 1, 2021 to May 31, 2022)

Nine Months Ended February 28, 2022

Listed company name:	Pasona Group Inc.
Listing stock exchange:	The Prime Market of the Tokyo Stock Exchange
Securities code number:	2168
URL:	https://www.pasonagroup.co.jp
Representative:	Yasuyuki Nambu, Group CEO and President
For further information contact:	Yuko Nakase, Senior Managing Executive Officer and CFO
Tel. [phone]

Scheduled filing date of quarterly report: April 14, 2022

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.

Operating IncomeOrdinary Income

Profit attributable to owners of parent

%	%	%
Nine months ended February 28, 2022	270,875	10.7	19.5	21.5	7,314	31.0
Nine months ended February 28, 2021	244,670	2.2	147.8	163.3	5,582	882.9

%

17,348 14,512

17,760 14,622

(Note) Comprehensive income 9M FY2021: ¥11,778 million(50.9%)

9M FY2020: ¥7,803 million (169.5%)Net Income per Share

Yen

Diluted Net

Income per Share

Nine months ended February 28, 2022

Nine months ended February 28, 2021

186.85 142.68

per Share ― ―

Yen

(2) Consolidated Financial Position

Total Assets

Net Assets

Equity Ratio (%)February 28, 2022

May 31, 2021

167,487 151,641

58,068 49,779

26.8 25.2

(Reference) Equity As of February 28, 2022: ¥44.943 million As of May 31, 2021: ¥38,155 million

(Note) In total assets as of May 31, 2021 and February 28, 2022, 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

End of	End of	End of
First Quarter	Second Quarter	Third Quarter
Yen	Yen	Yen
FY2020	-	0.00	-
FY2021	-	0.00	-
FY2021 (Forecast)

Fiscal Year-End

Total

Yen 30.00

Yen 30.00

30.00

30.00

(Note) Revision to dividend forecast in the current quarter: No

3. FORECAST OF RESULTS FOR THE FISCAL YEAR ENDING MAY 31, 2022

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

Net Sales

Operating IncomeOrdinary Income

Profit attributable to Net Income per owners of parent

SharesFY2021 Full Fiscal Year

368,000

% 10.0

22,000

% 10.3 22,000

% 7.9

8,500

% 25.3

Yen 217.14

(Note) Revision to forecast of results in the current quarter: No

From the beginning of the first quarter in FY2021, "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29) is applied. Above "FORECAST OF RESULTS" are based on the accounting standard. Percentage figures are calculated based on the results before reclassification in FY2020 Full Fiscal Year.

4. NOTES

• (1) Changes in important subsidiaries during the current period: None

  (Changes in specified subsidiaries that caused changes in the scope of consolidation)

• (2) Application of the special accounting practices in the preparation of quarterly consolidated financial statements:

  None

• (3) Changes of accounting principles, changes in accounting estimates and retrospective restatement

  • 1) Changes of accounting principles in line with revisions to accounting and other standards: Yes

  • 2) Changes of accounting principles other than 1) above: None

  • 3) Changes in accounting estimates: None

  • 4) Retrospective restatement: None

• (4) Number of shares issued and outstanding (Common shares)

  • 1) The number of shares issued and outstanding as of the period-end (including treasury shares)

    February 28, 2022: 41,690,300 shares May 31, 2021: 41,690,300 shares

  • 2) The number of treasury shares as of the period-end

    February 28, 2022: 2,516,094 shares May 31, 2021: 2,550,899 shares

  • 3) Average number of shares for the period (Quarterly cumulative period)

    Nine months ended February 28, 2022: 39,148,225 shares

    Nine months ended February 28, 2021: 39,130,010 shares

(Note)

The Company has introduced "Board Benefit Trust (BBT)" and "Employment Stock Ownership Plan (J-ESOP)". The Company's shares in the BBT and J-ESOP, which are reported as treasury shares under Shareholders' equity, are counted as the number of treasury shares as of the average number of shares outstanding for the period for the purpose of not including for computing earnings and net assets per share.

The Quarterly Financial Report is not subject to a quarterly review conducted by CPA or audit firm.

Cautionary statement and other explanatory notes

The aforementioned forecasts are based on assumptions and beliefs in light of information available to management at the time of document preparation and accordingly include certain unconfirmed factors. As a result, readers are advised that actual results may differ materially from forecasts for a variety of reasons. Please refer to "Overview of Consolidated Forecasts" on page 5.

Method to obtain supplemental materials for quarterly financial results

Supplemental materials for the quarterly financial results have been posted on the Company's website (https://www.pasonagroup.co.jp/ir/) since April 14, 2022.

Consolidated Financial Report
Nine Months Ended February 28, 2022
INDEX
1.	Information Concerning Quarterly Consolidated Business Results
(1) Consolidated Business Results	･････	p. 4
(2) Overview of Consolidated Financial Position	･････	p. 5
(3) Overview of Consolidated Forecasts	･････	p. 5
2.	Quarterly Consolidated Financial Statements and Notes
(1) Quarterly Consolidated Balance Sheets	･････	p. 6
(2) Quarterly Consolidated Statements of Income	･････	p. 8
(3) Quarterly Consolidated Statements of Comprehensive Income	･････	p. 9
(4) Notes to Going Concern Assumption	･････	p. 10
(5) Notes on Significant Changes in the Shareholders' Equity	･････	p. 10
(6) Changes in Accounting Policies	･････	p. 10
(7) Additional Information	･････	p. 11
(8) Segment Information	･････	p. 11
(9) Important Subsequent Events	･････	p. 14

9M FY2021 Consolidated Financial Report

(June 1, 2021 - February 28, 2022)

1. Information Concerning Quarterly Consolidated Business Results (1) Consolidated Business Results

Net salesOperating income Ordinary income

Profit attributable to owners of parent

9M FY2020

244,670

270,875

14,512 14,622

5,582

Segment Information (Figures include intersegment sales)

Consolidated Net Sales by Segment

17,348 17,760

7,314

9M FY2020 9M FY2021

HR Solutions

Expert Services (Temporary staffing), BPO Services (Contracting), Others

Expert Services (Temporary staffing) BPO Services (Contracting)

HR Consulting, Education & Training, Others Global Sourcing (Overseas)

Career Solutions (Placement / Recruiting, Outplacement) Outsourcing

Life Solutions

240,832

111,185

82,402

5,731

9,373

27,077

Regional Revitalization Solutions

Eliminations and Corporate Total

2,173

(3,218)

244,670

Consolidated Operating Income (Loss) by Segment

HR Solutions

Expert Services (Temporary staffing), BPO Services (Contracting), Others

Expert Services (Temporary staffing) BPO Services (Contracting)

HR Consulting, Education & Training, Others Global Sourcing (Overseas)

Career Solutions (Placement / Recruiting, Outplacement) Outsourcing

32 2,200 6,919

Life Solutions

Regional Revitalization Solutions

Eliminations and Corporate Total

224 (1,555) (6,647) 14,512

(Millions of yen)

YoY

+10.7% +19.5% +21.5%

+31.0%

(Millions of yen)

267,109

114,102

102,518

6,256

11,021

27,065

3,291

(4,788)

270,875

YoY

+10.9%

+12.1%

+2.6%

+24.4%

+9.2%

+21.4%

+17.6%

(0.0)%

+7.8%

+51.4% －

+10.7%

(Millions of yen)

9M FY2020 9M FY2021

22,491 13,371

26,967 14,075

13,338

13,818

257 3,358 9,533

177 (1,702) (8,094) 17,348

YoY

+19.9% +5.3%

+3.6%

+682.3% +52.6% +37.8%

(20.9)%

－ － +19.5%

※Since the end of FY2020, the segment of some subsidiaries has been changed with the reorganization of subsidiaries. The above tables regarding results in 9M FY2021 show the figures reclassified into the new segment classification.

(2) Overview of Consolidated Financial Position

Status of Assets, Liabilities and Net Assets

Assets and liabilities at the end of the third quarter of the current fiscal year included temporary "Deposits received" from clients related to contracted projects for which use by the Group is restricted and a corresponding "Cash and deposits" amounting to ¥1,109 million (¥1,989 million at the end of the previous fiscal year).

Assets

Total assets at the end of the third quarter increased by ¥15,846 million (up 10.4%) from the end of the previous fiscal year to ¥167,487 million. While cash and deposits decreased by ¥24,191 million, notes receivable, accounts receivable, and contract assets increased by ¥16,699 million due to an increase in contract projects, while property, plants, and equipment increased by ¥4,118 million due to regional development projects, etc., and goodwill increased by ¥11,277 million due to the acquisition of all shares of JTB Benefit Inc.

Liabilities

Total liabilities at the end of the third quarter increased by ¥7,557 million (up 7.4%) from the end of the previous fiscal year to ¥109,419 million. While long-term loans payable increased by ¥10,950 million due to fundraising, accounts payable-trade decreased by ¥1,284 million due to progress in payments, while provisions for bonuses decreased by ¥1,710 million due to bonus payments.

Net Assets

Net assets at the end of the third quarter increased by ¥8,289 million (up 16.7%) from the end of the previous fiscal year to ¥58,068 million. While profit attributable to owners of the parent was ¥7,314 million, dividend payments of ¥1,196 million resulted in a ¥6,130 million increase in retained earnings.

As a result, the equity ratio increased 1.6 percentage points from the end of the previous fiscal year to 26.8%. After deducting "Cash and deposits" associated with "Deposits received" for contract projects, total assets amounted to ¥166,377 million, and the equity ratio was 27.0%.

(3) Overview of Consolidated Forecasts

Since the third-quarter results are generally in line with plans, we maintain our full-year consolidated earnings forecast for the fiscal year ending May 31, 2022, which was announced on January 14, 2022.