Summary of Business Results for the Second Quarter Ended September 30, 2023
[Japan GAAP] (Consolidated)
November 13, 2023
Company
JP-HOLDINGS, INC.
Listed on the TSE Prime
Stock Code2749
URL: https://www.jp-holdings. co.jp
Representative
Tohru Sakai, President and Representative Director
Contact
Ryoji Tsutsumi, Director
T E L: +81-52-933-5419
Expected date of filing of quarterly securities report: November 13, 2023
Expected starting date of dividend payment: Preparation of quarterly supplementary financial document: Yes
Quarterly results briefing: Yes (for media members, institutional investors, analysts)（Rounded down to million yen）

1. Consolidated business results for the six months ended September 2023
(April 1, 2023 through September 30, 2023)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen%
18,057
4.9
2,020
34.4
Six months ended Sept. 2023
17,207
2.3
1,502
37.2
Six months ended Sept. 2022
(Note) Comprehensive income
Six months ended September 2023: 1,278 million yen (16.7%)
Six months ended September 2022: 1,094 million yen (53.7%)
Net income
Diluted net income perper share
share
Yen
Yen
15.02
Six months ended Sept. 2023
12.92
Six months ended Sept. 2022

Ordinary income
Million yen
1,965
1,521

%
29.1
36.9

Net income attributable toowners of parent

Million yen
1,279
1,130

%
13.2
59.4

(2) Consolidated financial position
Total assets

Net assets

Million yen
35,334As of Sept. 30, 2023
35,694As of Mar. 31, 2023
(Reference) Shareholders’ equity:
As of September 30, 2023: 14,363 million yen
As of March 31, 2023: 13,584 million yen

Million yen
14,363
13,584

Shareholders’ equity
ratio
%
40.7
38.1

2. Dividends
End of 1Q

Annual dividend
End of 3Q
Yen
Yen
0.00
0.00
-

End of 2Q
Yen-

Year ended Mar. 2023
Year ending Mar. 2024
Year ending Mar. 2024 (forecast)(Note) Revisions to dividend forecast for the current quarter: None
Breakdown of year-end dividend for the fiscal year ended March 2023
Ordinary dividend: 5.00 yen, Commemorative dividend: 1.00 yen

Year-end

Total

Yen
6.00

Yen
6.00

6.00

6.00

3. Forecast of consolidated business results for the fiscal year ending March 2024
(April 1, 2023 through March 31, 2024)(% change from the previous corresponding period)
Net sales

Net income attributable toowners of parent

Net income
per share

Operating income

Ordinary income

Million yen%

Million yen%

Million yen%

Yen

Year ending Mar. 2024
36,3902.5
3,820(Note 1) Revisions to business forecast for the current quarter: None

4.2

3,842

2.6

2,497

-7.5

29.32

Million yen%

*Notes(1) Changes in significant subsidiaries during the period: None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements:
None(3) Changes in accounting policies, accounting estimates and restatement①Changes in accounting policies associated with revision of accounting standards:②Changes in accounting policies other than ①③Changes in accounting estimates④Restatement: None: None: None: None(4) Shares outstanding (common stock)①Number of shares outstanding at the end of period (treasury stock included)
As of September 30, 2023
87,849,400 shares
As of March 31, 2023
87,849,400 shares②Treasury stock at the end of period
As of September 30, 2023
2,662,221 shares
As of March 31, 2023
2,697,857 shares③Average number of stock during period (quarterly cumulative period)
Six months ended September 2023
85,166,816 shares
Six months ended September 2022
87,474,811 shares*Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants or auditing
firms.
*Explanation regarding appropriate use of business forecasts and other special instructions∙ Forecasts regarding future performance in this material are based on information currently available to the Company and certain
assumptions that the Company deems to be reasonable at the time this report was prepared. Actual results may differ significantly
from the forecasts due to various factors. For information regarding the assumptions that form the basis for the business results
forecasts and notes about using business forecasts, etc., please refer to “1. Qualitative Information on Quarterly Financial Results(3) Consolidated Earnings Forecasts” (Page 5).
∙ The Company plans to hold an online meeting as the financial results briefing for media members, institutional investors andanalysts on Friday, November 17, 2023.

〇 Table of Contents of the Appendix
1. Qualitative Information on Quarterly Financial Results…………………………………………...…… 2(1) Results of Operations…………………………………………………………………………………..2(2) Financial Position…………………………………………………………………………………...… 4(3) Consolidated Earnings Forecasts……………………………………………………………………… 4
2. Quarterly Consolidated Financial Statements and Major Notes…………………………………..……... 5(1) Quarterly Consolidated Balance Sheets……………………………………………………………..… 5(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income………..…. 7(3) Notes on Quarterly Consolidated Financial Statements……………………………………………..… 9(Notes on going concern assumption)……………………………………………………………….… 9(Notes if there is a significant change in the amount of shareholders' equity)…………………...…… 9

1. Qualitative Information on Quarterly Financial Results(1) Results of Operations
During the first half of the current fiscal year, the Japanese economy was expected to continue its gradual recovery toward thenormalization of economic activities after the downgrading of the legal status of COVID-19 to "Class 5". However, the economic
outlook remains uncertain due to high prices caused by soaring energy and raw material prices and the impact of global monetary
tightening.
In the environment that surrounds our childcare support business, in April 2023, the government established the Children andFamilies Agency in response to the accelerating decline in the number of children. This agency, under the government's efforts toaddress the accelerating decline in birthrates, consolidates child-related policies and places emphasis on child-centric initiatives
and policies. Furthermore, in June 2023, the government issued the "Children's Future Strategy," which outlines concrete measures
to address the declining birthrate with different dimensions, further reinforcing the national policy to address the declining
birthrate. The specific measures of the "Children's Future Strategy" include improving the placement standards for childcare
workers, for the first time in 75 years, to establish a system where parents can leave their children to facilities with peace of mind.
This involves securing childcare personnel through further enhancements in their treatment. Additionally, a "Universal Childcare
System (tentative name)" is planned to be established, enabling all families with children to utilize childcare centers regardless of
employment requirements. These efforts are part of the "various measures to address the decline in birth rates”. As such, initiatives
aimed at creating a more supportive environment for childcare are being accelerated. The social role of childcare support initiatives
is believed to be increasingly crucial.
As described above, while the improvement of childcare environments by the government is being expanded, in areas where thebirthrate decline is accelerating, competition among childcare facilities is intensifying to acquire the number of children. Structuralreforms for sustained growth and further earnings expansion, and the development and early profitability of new businesses will be
required. In view of changes in the external environment, the medium-term management plan (from FY3/24 to FY3/26) will be
reviewed in line with the announcement of business forecasts for the fiscal year ending March 2024, with “Achieve growth andestablish a competitive advantage,” “Reform our profit structure,” and “Reform our management base” as priority targets. With
this, we will create new services and value, establish a competitive advantage and solve social problems through our business byproactively developing new businesses for growth, developing infrastructure utilizing M&As and systemization, and building solid
business foundations with structural reforms and business reforms. Through these efforts, we aim for sustainable growth while
realizing the management philosophy of our group: “Through child care support, we will contribute to creating smiles foreveryone.”
To effectively adapt to the changing social environment, we are deploying the following strategies. Firstly, we aim to "achieve
growth and establish a competitive advantage" by developing new businesses with a focus on medium to long-term growth.
Simultaneously, we are proactively considering M&As to not only expand existing operations but also to venture into new businessdomains. Furthermore, in order to enhance our competitive advantage, we plan to develop and expand new learning programs. For
instance, we will offer childcare and after-school programs that incorporate STEAM education, as well as after-school activities
such as English, gymnastics, and music classes.
Additionally, the strategy encompasses various initiatives, including the operation of a "bilingual nursery school" with English
native teachers as a new facility, test introduction of “Montessori education nursery school”, establishing a comprehensive
childcare support system for infants, toddlers, and school-age children, and adopting a dominant strategy through collaboration
between nursery schools, after-school clubs, and children’s clubs, aiming to double the current number of after-school clubs andchildren’s clubs to 200 facilities through proactive expansion efforts. Additionally, we are working on enhancing collaboration withlocal communities to establish the "My Nursery School System" to support those who are planning to have and raise children, as
part of our efforts to improve the parenting environment. As such, we are actively implementing a differentiation strategy as part ofour commitment to create " facilities that would continue to be selected by customers" in various regions. Furthermore, as part ofour new business initiatives, within the childcare support platform "codomel," we are expanding service offerings and products.
We are strengthening our capabilities for C2C, B2C, and B2B interactions, and conducting trial sales of pre-packaged food in
response to the problem of preparing dinner for parents. Additionally, we have established the real estate company "Kosodate
Support Realty Co., Ltd." within the group. This entity focuses on real estate intermediary services, property leasing, property
management, and real estate consulting related to childcare support operations. These efforts are aimed at achieving early revenue
generation.
Regarding "reform our profit structure," we are reassessing our business structure. We are optimizing staffing, enhancing financial
management, rigorously controlling costs, and achieving operational efficiency through the rectification of inefficient operations
and processes using data utilization. We are also committed to reducing indirect costs and further improving our operations throughbusiness process reforms and system implementations.
As for the “reform our management base,” the key to our business is people. Therefore, we will enhance our personnel educationand training structure. At the same time, we will retain and develop outstanding human resources and improve employee
engagement to lead to a change in awareness. Moreover, we are working to revitalize our organization by enhancing our humanresources strategy (expanding training and renewing our corporate culture), strengthening Group governance, and establishing an
on-site work and management system.

As for the new facility openings, the Group has opened a total of 10 facilities during the second quarter of the fiscal year ending
March 2024 according to the plan, including 1 nursery schools (1 in Tokyo) and 9 school clubs and children's houses (8 in Tokyo, 1
in Saitama).
(Nursery School)
Shinagawa Municipal Yashio Nishi Nursery School(School Club/Children's House)
Heisei Elementary School After School Kids’ Club
Ryusen Kids’ Club
(Apr. 1, 2023)
Chofu Municipal Chowa Elementary School Club No.2
Minamikko Hiroba
Minato-ku Houka-go→Club Konan
Takaban Elementary School Lan Lan Hiroba
Yonsho Aozora School Club
Asc Asakusabashi Kids’ Club
Matsubara Children's Club No.2

(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Jun. 1, 2023)(July 21, 2023)(Bilingual Nursery School)
The Company changed licensed nursery schools and Tokyo Licensed Nursery Schools to bilingual nursery schools, which isstaffed by native English-speaking teachers.
Asc Bilingual Nursery School Eifuku (formerly Asc Eifuku Nursery School)(Apr. 1, 2023)
Asc Bilingual Nursery School Kameido (formerly Asc Kameido Nursery School)(Apr. 1, 2023)
GENKIDS Bilingual Nursery School Shinkoyasu (formerly GENKIDS Shinkoyasu Nursery School)(Apr. 1, 2023)
Asc Bilingual Nursery School Asakusabashi (formerly Asc Asakusabashi Nursery School)(Jun. 1, 2023)
Ask Bilingual Nursery School Meidai-mae (formerly Asc Meidai-mae Nursery School)(Jun. 1, 2023)*1: As of March 31, 2023, the Company closed Tokyo Licensed Nursery School named Asc Fudo-mae Nursery School. In addition, due to the expirationof the contract, the Company withdrew from school clubs named Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 1, Wakuwaku Akabane
Hiroba/Akabane Children’s Club No. 2, Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 3, Wakuwaku Kirigaoka-sato Hiroba/Kirigaokasatokko Club No. 1, Wakuwaku Kirigaoka-sato Hiroba/Kirigaoka-satokko Club No. 2, Wakuwaku Kirigaoka-sato Hiroba/Kirigaoka-satokko Club No. 3,
Wakuwaku Fukuro Hiroba/Akakita Hibari Club No.3, Wakuwaku Yoniwa Hiroba/Yoniwa Elementary School Icho. Club No. 1, Wakuwaku Yoniwa
Hiroba/Yoniwa Elementary School Icho. Club No. 2, Mitaka Municipal Minamiura School Club Annex A, Minato-ku Houka-go→Club Honmura,Bunkyo-ku Meidai Temporary Childcare Room as of March 31, 2023.

As a result, the Group came to have 209 nursery schools, 86 school clubs, 11 children's houses, making a total of 306 childcare
facilities as of September 30, 2023.
As a result, the Group’s consolidated net sales were 18,057 million yen (up 4.9% year on year), operating income was 2,020
million yen (up 34.4% year on year), ordinary income was 1,965 million yen (up 29.1% year on year), and net income
attributable to owners of parent was 1,279 million yen (up 13.2% year on year).
The major factors are as follows:
In terms of net sales, the Company’s various initiatives aimed at creating "facilities that would continue to be selected bycustomers", such as the introduction of new early childhood learning programs, led to an increase in the number of children
during the mid-term period, opening of new facilities, and acquisition of new contracts. As a result, net sales increased by 4.9%
year on year.
In terms of operating income, the cost of sales increased due to an increase in electricity prices and a surge in the prices ofvarious purchased merchandise. However, we worked to control and reduce costs by increasing net sales through the abovementioned measures, maximizing the benefits of subsidies and improving operating efficiency by reallocating personnel at eachfacility and reviewing the ordering system. As a result, operating income increased by 34.4% year on year.
Ordinary income and net income attributable to owners of parent also increased by 29.1% and 13.2% year on year, respectively,
as a result of growth in net sales, improved sales at existing facilities, and efforts to control expenses through efficient operations.

(2) Financial Position
As for the financial position at the end of the second quarter of the current fiscal year, the total assets amounted to 35,334 million
yen (down 360 million yen from the end of the previous fiscal year).
Current assets totaled 23,537 million yen (down 76 million yen), mainly reflecting an increase of 696 million yen in cash anddeposits, while there were decreases of 637 million yen in accounts receivable, and 136 million yen in others.
Fixed assets totaled 11,797 million yen (down 284 million yen). This was mainly due to increases of 54 million yen in deferred tax
assets and 21 million yen in tools, furniture and fixtures, while decreases of 202 million yen in buildings and structures, 113
million yen in long-term loans receivable, and 44 million yen in investments and other assets.
Total liabilities amounted to 20,970 million yen (down 1,139 million yen).
Current liabilities totaled 8,807 million yen (up 513 million yen), mainly due to increases of 321 million yen in income taxes
payable, 162 million yen in current portion of long-term loans payable, and 102 million yen in provision for bonuses, while there
were decreases of 41 million yen in notes and accounts payable-trade and 40 million yen in accrued consumption taxes.
Fixed liabilities totaled 12,163 million yen (down 1,653 million yen). This was mainly due to a decrease of 1,683 million yen in
long-term loans payable.
Total net assets as of the end of the second quarter of the current fiscal year totaled 14,363 million yen (up 779 million yen),mainly due to an increase of 768 million yen in retained earnings and a decrease of 10 million yen in treasury stock.

(3) Consolidated Earnings Forecasts
The full-year consolidated earnings forecasts have not been revised from the announcement on May 11, 2023, but actual results
may be different from the forecast according to the changes in business situations, etc.
If there are any changes, the Company will disclose them properly.

2. [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets](Thousand yen)Previous Fiscal Year
(March 31, 2023)

Current Second Quarter(September 30, 2023)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

19,330,865
60,19820,027,418
75,679Inventories
Accounts receivable - other55,476
3,263,596

40,842
2,625,770

904,246-1,291

767,668-364

23,613,092

23,537,015

12,024,967

12,023,174

Accumulated depreciation and impairment-7,640,405-7,840,966

Buildings and structures, net

4,384,561

4,182,208

Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures

Machinery, equipment and vehicles

203

203

Accumulated depreciation

-150

-165

Machinery, equipment and vehicles, net

5338

1,340,178

1,425,843

Accumulated depreciation and impairment-869,662-933,782

Tools, furniture and fixtures, net

Tools, furniture and fixtures

470,516

492,060

Land
Construction in progress

129,529330

129,529-

Total tangible fixed assets

4,984,990

4,803,837

106,350

91,157

Intangible assets
Goodwill
Other

39,68935,429Total intangible assets

146,040

126,587

Investment securities
Long-term loans receivable

406,875
2,804,871

424,355
2,691,312

Guarantee deposits
Deferred tax assets

1,819,824
1,458,611

1,824,728
1,512,898

Other
Allowance for doubtful accounts

465,177-4,727420,355-6,688

Total investments and other assets

6,950,632

6,866,964

Investments and other assets

Total fixed assets
Total assets

12,081,664

11,797,388

35,694,756

35,334,404

(Thousand yen)Previous Fiscal Year
(March 31, 2023)

Current Second Quarter(September 30, 2023)

Liabilities
Current liabilities
Notes and accounts payable-trade
Current portion of long-term loans payable

186,091
3,654,742

144,5113,816,818

Accounts payable – other
Income taxes payable

1,681,700
433,452

1,713,625
754,912

Accrued consumption taxes
Reserve for bonuses

92,647866,100

52,551
968,160

Asset retirement obligation
Other

3,087
1,376,561

1,356,919

Total current liabilities

8,294,383

8,807,498

12,226,111
970,699

10,542,183
1,000,179

Fixed liabilities
Long-term debt
Retirement benefit liability
Asset retirement obligation

619,549

620,944

13,816,359

12,163,306

22,110,742

20,970,805

CapitalCapital surplus

1,603,955
1,455,989

1,603,955
1,457,965

Retained earnings
Treasury stock

11,422,289-784,199

12,190,738-773,840

Total shareholders’ equity

13,698,034

14,478,818-111,798-113,823

1,143-3,365

1,216-2,612

Total fixed liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-forsecurities
Deferred gains or losses on ledges
Remeasurements of defined benefit plans

sale

Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-114,020-115,219

13,584,013

14,363,598

35,694,756

35,334,404

(2) [Quarterly Consolidated Statements of Income and Statements of Comprehensive Income][Quarterly Consolidated Statement of Income][Second Quarter of FY3/24]

Net sales
Cost of sales

Previous Second Quarter(Apr. 1, 2022
- September 30, 2022)
17,207,871
14,300,013(Thousand yen)
Current Second Quarter(Apr. 1, 2023
- September 30, 2023)
18,057,936
14,725,453

Gross profit

2,907,858

3,332,482

Selling, general and administrative expenses

1,404,938

1,311,897

Operating income

1,502,920

2,020,584

39,80637,011

Other

16,032

14,598

Total non-operating income

55,83951,61035,474-35,68370,000Non-operating income
Interest income

Non-operating expenses
Interest expenses
Arrangement fee
Other

1,318

1,329

Total non-operating expenses

36,793

107,012

Ordinary income

1,521,966

1,965,182

Extraordinary income
Gain on sales of fixed assets

215,276-

Extraordinary income

215,276-108

0

Extraordinary loss
Loss on retirement of fixed assets

1080Income before income taxes and others

Total extraordinary loss

1,737,134

1,965,182

Corporate, inhabitant and enterprise taxes
Income taxes-deferred

616,304-9,439739,645-53,821

Total income tax

606,864

685,823

Net income

1,130,270

1,279,358

Net income attributable to owners of parent

1,130,270

1,279,358

[Quarterly Consolidated Statement of Comprehensive Income][Second Quarter of FY3/24]

Net income
Total accumulated other comprehensive income
Valuation difference on available-for- sale securities
Deferred gains or losses on ledges
Remeasurements of defined benefit plans
Total other comprehensive income

Previous Second Quarter(Apr. 1, 2022
- September 30, 2022)
1,130,270(Thousand yen)
Current Second Quarter(Apr. 1, 2023
- September 30, 2023)
1,279,358-46,430
2,423-2,024
72

8,567

752

-35,439-1,199Comprehensive income

1,094,830

1,278,158

BreakdownComprehensive income attributable to owners of parent

1,094,830

1,278,158

(3) Notes on Quarterly Consolidated Financial Statements(Notes on going concern assumptions)
Second quarter of FY3/24 (April 1, 2023 – September 30, 2023)
None applicable(Notes if there is a significant change in the amount of shareholders' equity)
Second quarter of FY3/24 (April 1, 2023 – September 30, 2023)
None applicable