SUS Co.,Ltd.

Competition to acquire engineering talent is intensifying due to the declining working-age population from the falling birthrate and aging society, as well as the decrease in new graduates with specialized education stemming from the growing aversion to science and engineering fields. If the necessary personnel cannot be secured as planned, or if the number of engineers decreases significantly due to turnover, this will directly affect business performance. The Group is working to improve the efficiency of recruitment expenses and enhance the quality of personnel through strengthened corporate branding initiatives and the diversification and optimization of recruitment channels.

The engineer dispatch industry is heavily influenced by the business performance trends of IT-related companies and major manufacturers. If clients continue to restrain capital expenditure and reduce R&D spending due to a prolonged economic downturn or changes in the economic environment, this will affect business performance. Large-scale natural disasters and the overseas relocation of clients' development bases are also risks that could impede business continuity. The Group strives to secure stable placements by providing training adapted to customer needs and developing new clients.

Numerous companies operate in the engineer dispatch industry, and during economic downturns, there is a risk that transaction unit prices will decline due to price competition among competitors. Business performance can also be adversely affected if a large number of engineers remain on standby without assignments. The Group is working to strengthen its competitiveness and specialization through education and training aimed at enhancing the added value of its engineers.

The Engineer Dispatch Service, the Group's core business, is operated in accordance with the Worker Dispatching Act. If the Group falls under any disqualification provisions or violates applicable laws, this could lead to a suspension of business operations or revocation of its license. There is also a risk that changes in laws or their interpretation, resulting from shifts in the social environment, could adversely affect business operations. The Group monitors and confirms compliance status through its Risk Management Committee and Internal Audit Office, and works to ensure thorough compliance (Worker Dispatching Business License Number: Haken 26-020056, valid until February 28, 2030).

Labor management is the most critical issue in the Engineer Dispatch Service business. If legal violations or employee misconduct occur due to inadequate management, this could result in claims for damages, disputes with employees, administrative sanctions, and loss of trust, thereby affecting business performance. The Group monitors working conditions through its Health and Safety Committee and Risk Management Committee, and thoroughly develops and enforces internal regulations and manuals.

In the Solutions Business, engineers engaged in client companies' product development and system development work handle a large amount of personal and confidential information. If information leakage occurs, whether intentional or due to negligence, this could give rise to issues of management responsibility, litigation risk, reputational damage, and substantial compensation payments. The Group strengthens information management by building a personal information protection management system through obtaining the Privacy Mark, conducting regular training for all employees, and implementing internal audits.

The Group plans to launch new businesses and form capital and business alliances with the aim of securing new revenue bases and expanding career paths for engineers; however, there is a risk that such initiatives may not progress as planned and may fail to generate the initially expected returns. Management decisions such as withdrawal or downsizing, made in consideration of business profitability, may also affect business performance. The Group manages investment risk through deliberation and resolution at meetings based on investment decision criteria, as well as through budget-versus-actual management and periodic reporting on business plans.

The IT field, in which the Group has particular strength, is characterized by rapid technological innovation, including AI, and swift changes in customer needs. If the Group fails to respond to unexpected technological innovation or rapid shifts in needs, its competitiveness could decline significantly, affecting business performance. The Group continuously analyzes and keeps up with the latest technology and market trends, and strives to respond flexibly to change by utilizing such insights in its business.