TSE1 (2749)

https://www.jp-holdings.co.jp/

Financial Results for the 2Q of Fiscal Year ending March 2022

JP-HOLDINGS, INC.

INDEX
1

Outline of JP Holdings, and its Efforts to Attain SDGs

2

2Q FY3/22 Results

3

New Medium-Term Management Plan andMeasures for the Second Half

4

APPENDIX© 2021 JP-HOLDINGS, INC.

2

1

Outline of JP Holdings, and its
Efforts to Attain SDGs

3

Every activity is for children’s smiles

Leading company in the child-raising support business
JP Holdings Group is a leading company in the child-raising support business, andoperates childcare support facilities, including nursery schools, school clubs, andchildren’s houses.
JP Holdings Group was founded in 1993, and started childcare business by establishing a day-care
center for children of our employees so that they can work without worry. As joint-stock corporations
were allowed to do nursery business in 2000, we first spread safe, reliable childcare services
nationwide, while being supported by various people.
Group companies include Japan Nursery Service Inc., Amenity Life Inc., J Kitchen Inc., which cooks
meals for nursery schools, J Cast Inc., which offers classes in English, gymnastics, and eurhythmics forchildcare support facilities, J Planning Sale Inc., which plans and sells childcare-related goods, andJapan Nursery Institute for General Research Inc., which conducts training and research aboutchildcare and support for development. These subsidiaries are managed and supervised by JP
Holdings, Inc.

4

Social Issues to be Solved with Our BusinessSocial issues to be solved with our businessChildcare
support

Educational
supportRelated SDGs

Improve the quality ofchildcare support
Reduce the numberof children on waitinglistsPromotion of high-quality childcare support
Establishment of new facilities for
decreasing the number of children on waitinglistsDevelopment and provision of online
childcare while grasping changes in thesocial environmentSafe, reliable facilities and operation
Provision of nutritious lunch for maintaining
healthEnrichment of support for child development

Offer high-quality
early childhood
learning

Development and enrichment of educational
programs (English, exercise, eurhythmics
and dancing)Development and promotion of online
education
Development of programs for early childhood
learning at home in response to changes inthe social environment
Provision of early childhood learning
opportunities

×
Partnership

Major activities

To help solve social issues based on the partnership withstakeholders© 2021 JP-HOLDINGS, INC.

5

Social Issues to be Solved with Our Corporate Activities
Social issues to be solved withour corporate activities

Personnel
development

Related SDGs

Improvement in expertise andactualization of independent
career development

Major activities
Promotion of work style reformEnrichment of training structure
Career paths and job rotation

Empowermentof women

Actualization of diversityminded workplaces

Workstyles tailored to lifestyles
Systems for childbirth, childcare, andnursing care
Development of a proper businessenvironment

Human rights
and D&I*1

Actualization of diverse
workstyles

Utilization of diverse human resources andsound business administration
Development and production of female
leaders

Socialcontribution to
local
communities

Creation of a childcare
environment

Promotion of childcare support in local
areasPromotion of employment
Promotion of prevention of abuse

Earthenvironment

Contribution to a sustainable
earth environment

Partnership

To help solve social issues based on the partnership withstakeholders

×Creation of environmentally sound facilities
Reduction of CO2 emissions by installing
LED lighting
Reduction of food loss and waste*1: Diversity & inclusion (To create something new by utilizing different experiences and accepting differences)© 2021 JP-HOLDINGS, INC.

6

Initiatives to Solve Social Issues
⦿As a mission of an enterprise that operates childcare support business, wewill approach impoverished households and take measures for preventing
child abuse, which are social problems.
We will discuss various measures for raising and donating funds, and determine and actively
promote “activities” and “initiatives” for the future of children.
(In December 2020 and May 2021, we conducted the “support for single-parent households.”)
No poverty

Prevention of child abuse© 2021 JP-HOLDINGS, INC.

7

Our Brand Development Efforts
Corporate identity activities essential
for brand development

Differentiation from othercompanies▶Renewal of our management philosophy▶Attractive points of JPHD Group▶Formulation of our childcare philosophy and▶Childcare/child-rearing activities

child-rearing philosophy▶Development of new programs▶Renewal of our credo▶Collaborative research between▶Production of CI manuals

industry and academia▶Setting of signboards for nursery schools

Broad dissemination in society
Reform of staff’s awareness

Development of nursery schools and facilities
that would be selected by customers© 2021 JP-HOLDINGS, INC.

8

Renewal of our Management Philosophy and Corporate Message●To renew our management philosophy and operational philosophy, and produce a new corporate message●Under the new philosophies, we will improve our child-raising support business based on the cooperation
with local communities.

JP HoldingsGroup’s System
Management philosophy

Corporate message

Operational philosophy
Childcare philosophy andchild-raising philosophy

To contribute to the development of a society filled withsmiles through childcare support
Every activity is for children’s smiles
To conduct childcare and child-rearing while giving top priority
to safety and reliability
To put importance on daily childcare, so that our facilities will be
remembered foreverTo bring a smile to each child, while our staff can enjoy their jobs
To contribute to society by operating facilities that are connected
to and support local communities
To always offer child-raising support demanded by the times

Childcarephilosophy
To nurture the skills to survive tomorrow

Child-rearing
philosophy
To develop the ability to become an ideal self
© 2021 JP-HOLDINGS, INC.

9

2

2Q FY3/22 Results

10Summary of the 1st Half of FY3/22
Our digitalization measures paid off, and the number of children accepted increased and ourrevenues improved considerably.
Measures

OutcomesIssues to be addressed
The capability of disseminating information needs tobe improved.
Cooperation with municipalities, approach toguardians, collaboration with local communities

1

Develop nursery schools and facilities
that would be selected by customers

Online facility tours
Improvement of the environment of each nurseryschoolImplementation of digitalization programs (English,
gymnastics, eurhythmics, and dance)
Enrichment of early childhood learning programs
Start of the support business by visiting nurseryschoolsSignificant improvement in income andexpenditure through the setting of KPIs
Proper allocation of personnel and streamlining ofoperation
Undertook the operation of more school clubs(increasing our dominance)To eliminate regional disparities
To receive more subsidies

2

Improve profitability at childcare support
facilities
Enhance the cooperation between
nursery schools and school clubs

To review business operations in order to further
streamline them
To curtail labor expenses through proper allocation of
personnel

Actualize a compact head officeRestructuring of businesses inside our corporate
group
Integration of group businesses and centralizationof head officeRemoval of unnecessary tasks and proper
allocation of head office personnel throughsystematization
Development of next-generation leaders(improvement of training)Enrichment of the early childhood learning
program and integration of procurement processes
based on the business alliance with Gakken HD
Promotion of the platform businessNew business based on the membership system

To expand the business scale other than subsidies
To put demonstrations and experiments into practice3

4

Implement growth strategies© 2021 JP-HOLDINGS, INC.

11

JP2Q FY3/22 Results
Sales and profit grew, thanks to the effects of various measures and the curtailment of expenses,
despite the augmentation of costs caused by special factors.
Net sales: Net sales grew due to the increase of children accepted after the opening of new facilities and the implementation of various
measures, mainly for digitalization.
Operating income: Operating income rose thanks to the expansion of net sales and the curtailment of expenses, despite of an increasein accrued bonuses reflecting a change in the eligible period for bonuses due to the adoption of a new personnel system and an increase in
expenses related to the new system introduction.
Net income*1: Net income rose thanks to the improvement of profitability, the implementation of measures, mainly for digitalization, andcurtailment of expenses, although some special factors augmented expenses.
2021年3月期
2Q
FY3/21
第2四半期

2022年3月期
2Q FY3/22
第2四半期

Net
sales
売上高

16,262

16,814

552

3.4%

Gross
profit
売上総利益

2,437

2,665

228

9.4%

販売費及び一般管理費
SG&A expenses

1,498

1,570

71

4.8%

Operatingincome
営業利益

938

1,095

Ordinary
income
経常利益

955
551
6.30
yen円
6.30

8.11
yen円
8.11

1.81
yen
1.81
円

28.7%
28.7
%

33.7%

31.4%

△2.3%

－

(Million yen)

(単位:百万円)

Net income attributable to
親会社株主に帰属する
owners of parent
四半期純利益/当期純利益
1株当たり
Net income per share
四半期純利益/当期純利益
自己資本比率Shareholders’equity ratio(End of fiscal year for the previous year)(前期は期末)前期増減
Change前期増減比
Pct. change

Progress
rate to
業績予想
business
達成率
forecasts

Business
業績予想
forecasts

49.6%

33,900156 16.7%

40.1%

2,730

1,111

156 16.3%

40.3%

2,760

708

157 28.6%

40.2%

1,760

－

20.12
yen
20.12
円

*1: Net income represents “Net income attributable to owners of parent.”*2: We changed the presentation methods, to include subsidy income for childcare business, which had been posted in nonoperating income, in “Net sales” from the first quarter of the current fiscal year.
© 2021 JP-HOLDINGS, INC.

12

Upward Revision of the Business Forecasts for FY3/22
Growth in sales and profit thanks to new measures based on digital technologies andcurtailment of expenses
New measures

Curtailment ofexpenses
Improvement in
profitability

Revenues are expected to grow, as we will conduct facility tours by utilizing digital technologies and programs
for learning English, gymnastics, eurhythmics and dance online amid the COVID-19 pandemic, adopt new earlychildhood learning programs, implement online exchange programs with overseas people, and so on, todevelop “nursery schools and facilities that would be selected by customers.”
Profit is expected to rise, thanks to the improvement in profitability at each facility by efficient operation
through reallocation of personnel at each facility and review of recruitment activities as well as to thecurtailment of expenses through the review of the ordering system for various supplies and equipment.

(Million yen)

Revisedforecasts

Change fromthe previous
forecasts

Change fromthe previous
termPrevious
forecasts

Results in theprevious term

Net sales

33,9000.6%

1.2%

33,70033,500Operatingincome

2,730

18.7%

-4.5%

2,300

2,857

Ordinary
income

2,760

20.0%

-6.4%

2,300

2,947

Net income
attributable toowners of parent

1,760

21.4%

227.4%

1,450

537

Net income pershare

20.12 yen

3.54 yen

13.97 yen

16.58 yen

6.15 yen*1: We changed the presentation methods, to include subsidy income for childcare business, which had been posted in nonoperating income, in “Net sales” from the first quarter of the current fiscal year.
© 2021 JP-HOLDINGS, INC.

13

2Q FY3/22 Factors for Changes in Net Sales
Net sales

At the beginning of the term, the number of children accepted decreased due tothe spread of COVID-19, but sales grew, as we conducted facility tours andprograms online by utilizing digital technologies and opened new facilities.

173
408

16,262-166
Decrease dueto the closureof classes
and schools

Net
sales

2Q FY3/21

64

Increases inextendedchildcare andIncrease insubsidies due to the revenues fromlunch
enhancement ofcountermeasures

Increase due toopening of new
facilities andswitch tolicensed nurseryschool

16,81473
Increases in
product
sales, etc.

Net
sales

2Q FY3/22(Unit: million yen/Rounded down to the nearest million yen)
© 2021 JP-HOLDINGS, INC.

14

2Q FY3/22 Factors for Changes in Operating Income
Operatingincome938

Operatingincome2Q FY3/21

Although expenses augmented due to special factors, including an increase inaccrued bonuses reflecting a change in the eligible period for bonuses after the
adoption a new personnel system and an increase in expenses related to the new
system introduction, sales increased after the opening of new facilities, andexpenses were curtailed through reallocation of personnel at each facility and thereview of recruitment activities. As a result, operating income grew.

228

71
SG&A

Gross profit

Increases in
accrued bonuses
and head officepersonnel due tothe adoption of anew personnel
system, etc.

Increase due to thereallocation of personnel,
and the curtailment ofcosts for recruitment inaddition to the sales
growth thanks to the
opening of new facilities
and the increase ofchildren accepted

1,095

Operatingincome2Q FY3/22(Unit: million yen/Rounded down to the nearest million yen)
© 2021 JP-HOLDINGS, INC.

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2Q FY3/22 Factors for Changes in Ordinary Income
Ordinary
incomeOrdinary income grew considerably, thanks to the sales growth due to theincrease of children accepted after the opening of new facilities and theimplementation of measures mainly for digitalization, efficient operation,and curtailment of expenses.

156

955

Ordinary
income2Q FY3/21

OperatingincomeRise in operating
income due tocurtailment ofexpenses in
addition to thesales growth due tothe opening of new
facilities andmeasures

0.3

-0.9

Increase in nonoperating income

Decrease in nonoperating expenses

1,111

Ordinary
income2Q FY3/22(Unit: million yen/Rounded down to the nearest million yen)
© 2021 JP-HOLDINGS, INC.

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2Q FY3/22 Factors for Changes in Net Income
Net income
attributable toowners of parent

Net income attributable to owners of parent increased significantly, thanks to theincrease of children accepted after the opening of new facilities and theimplementation of measures mainly for digitalization, and efforts to curtail
expenses, despite the augmentation of costs caused by special factors in thecurrent term.

-112
156

551

Ordinary
income

108

708

-1
Decrease in
extraordinary
incomeDecrease in
extraordinaryloss

Increase inincome taxes

Increase inoperating income

Net income
attributable toowners ofparent2Q FY3/21

Net income
attributable toowners ofparent2Q FY3/22(Unit: million yen/Rounded down to the nearest million yen)
© 2021 JP-HOLDINGS, INC.

17

2Q FY3/22 Consolidated Results (Financial Position)
Increase of cash on hand, due to the augmentation of borrowing for coping with the spread of COVID-19
Liabilities, Net Assets, Shareholders’ Equity Ratio

Financial condition
End of September 2021*( ) = Difference with the end of March 2021

Liabilities－ Net Assets

Liabilities

Assets

22,672 million yen

33,051 million yen(+3,310 million yen)(+2,939 million yen)

Net assets
10,378 million yen(+371 million yen)

End of Mar. 2021

End of Sep. 2021

Current assets

15,13919,276

Fixed assets

14,601

13,774

Total assets

29,74033,051

Current
liabilities

7,829

8,138

Fixed liabilities

11,903

14,533

Total liabilities

19,732

22,672

Total net assets

10,007

10,378Million yen

19,732 million yen
33.7－－ Shareholders’ Equity Ratio (%)

22,672 million yen
31.4

10,007 million yen

10,378 million yen

End of FY3/21

End of Sep. FY3/22

Cash and deposits
Inventory assets
Accounts receivable-otherConstruction in progress

15,890 million yen
43 million yen
2,491 million yen
1 million yen

Current portion of long-term loans-payable
Accounts payable
Income taxes payable
Long-term loans payable

3,936 million yen
1,226 million yen
356 million yen
13,009 million yen

Retained earnings
7,546 million yen
Accumulated other comprehensive income-113 million yen(Figures are rounded down to the nearest million yen, and the equity ratio is rounded off to the nearest first decimal point place.)© 2021 JP-HOLDINGS, INC.

18

2Q FY3/22 Consolidated Results (Balance Sheet)
End of FY3/21(Million yen)

Total current assets(Cash and deposits)(Accounts receivable-other)

Total fixed assets(Total tangible fixed assets)(Total intangible fixed assets)(Total Investments and otherassets)Total assets
Total current liabilities(Current portion of long-term loanspayable)(Accounts payable)

Total fixed liabilities(Long-term loans payable)

Total liabilities
Total net assets
Total liabilities and net assets

2Q FY3/22(Million yen)

Change(Million yen)

15,13911,0203,009
14,6016,701
214

19,276
15,8902,491
13,774
6,073
192

4,137
4,869
-518
-826
-627
-21

7,685

7,508

-177

29,7407,829

33,051
8,138

3,310
309

3,307

3,936

628

1,634
11,903
10,305
19,732
10,00729,7401,226
14,53313,00922,672
10,37833,051

-408
2,630
2,703
2,939
371
3,310

(Rounded down to the nearest million yen)
© 2021 JP-HOLDINGS, INC.

19

2Q FY3/22 Consolidated Results (Cash Flows)
Operating CF: Increase in pretax profit, depreciation and amortization, and accrued bonuses
Investing CF: Growth of revenues from subsidies and collection of long-term loans receivable,
and expenditure for acquiring property, plant and equipment
Financing CF: Augmentation of long-term loans payable for coping with the effects of COVID-19(Million yen)

2Q FY3/21

2Q FY3/22

ChangeCash flows fromoperating activities

1,107

1,588

480

Cash flows frominvesting activities

442

287

-155

Free cash flow

1,549

1,875

326

Cash flows fromfinancing activities

759

2,994

2,235

Cash and cash
equivalents at end of
period8,515

15,890

7,375(Rounded down to the nearest million yen)
© 2021 JP-HOLDINGS, INC.

20

FY3/22 Forecast

21

Upward Revision of the Previous Earnings Forecasts●Our company adopted digital technologies
actively compared with competitors.
▷Online facility tours, online learning
programs such as English, gymnastics,
eurhythmics and dance, online international
exchange programs and enrichment of earlychildhood learning program●To actively develop nursery schools andfacilities that would be selected bycustomers, to increase the children accepted
not only for the current fiscal year, but also
for the next fiscal year

Dance program●Net sales: Up 0.6%
Previous forecasts: 33,700 million yen➡33,900 million yen●Operating income: Up 18.7%
Previous forecasts: 2,300 million yen➡2,730 million yen●Ordinary income: Up 20.0%
Previous forecasts: 2,300 million yen➡2,760 million yen●Net income attributable to owners of parent: Up 21.4%
Previous forecasts: 1,450 million yen➡1,760 million yen

International exchange program

Education on agriculture© 2021 JP-HOLDINGS, INC.

22

FY3/22 Forecast
Difference
Difference
between
Revised forecast between revised
forecast andrevised andfor FY3/22
previous results initial forecast

Previous
forecast for
FY3/22

FY3/21
actual

33,50033,70033,900400

400Operating income (million yen)

2,857

2,300

2,730

-127

430

Ordinary income (million yen)

2,947

2,300

2,760

-187

-

Net income attributable to owners ofparent (million yen)

537

1,450

1,760

1,223

-

Net income per share (yen)

6.15

16.58

20.12

10.43

-

Amount of dividend per share (yen)

3.90

4.50

4.50

0.6

-

Payout ratio (%)

63.4

27.1

27.1

-36.3

-

4

3

3
-１

-

3

-

Net sales (million yen)

Expected opening of nursery school(school)

Expected consignment of school clubs
and children’s houses (facility)

Switch to
Switch to
Switch to licensed
licensed nurserylicensed nursery
nursery school: 2
school: 1
school: 2588(Unit: million yen/Rounded down to the nearest million yen)
© 2021 JP-HOLDINGS, INC.

23

Dividend Forecast For FY3/22
⦿Dividend policy
The Company pays a performance-based dividend with a consolidated payout ratio of around 30%
while securing the internal reserves necessary to develop business in the future and strengthen ourmanagement structure.
In this term, the Company will pay a dividend of 4.50 yen while referring to performance forecast andconsidering the impact of COVID-19.

3.50 yen

3.70 yen

3.90 yen

3.90 yen

4.50 yen

Payout ratio
32.7%

Payout ratio
29.7%

Payout ratio
30.4%

Payout ratio
63.4%

Payout ratio
27.1%

FY3/18

FY3/19FY3/20FY3/21(Planned)

FY3/22(Forecast)*The year-end dividend for FY3/21 will be the dividend per share if approval is obtained at the Company’s 29th Ordinary General Meeting of Shareholders.
© 2021 JP-HOLDINGS, INC.

24

New Openings For FY3/22
FY3/21 New Openings
Nursery Schools: 3
School Clubs: 8
Total: 11
On April 1, 2021, we transformed “Ask Ontake Nursery School,” which
has been in operation since August 1, 2003, and “Asc Shimomaruko
Nursery School,” which has been in operation since April 1, 2010, from
Tokyo licensed nursery school to licensed nursery schools.
As “Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko
Club No. 1” was established, “Wakuwaku Takinogawa Momiji Hiroba” wasrenamed “Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji
Genkikko Club No. 1.” on April 1, 2021, and has been in operation sincethen.
At the end of March 2021, we closed “Asc Iidabashi Nursery School,”“Asc Nishishinjuku Nursery School,” “Asc Ikebukuro Nursery School,” and“Asc Yukigaya-Otsuka Nursery School,” which are Tokyo licensed
nursery schools, and “AEL Yokohama Business Park,” which is a private
school club. In addition, we withdrew from the operation of “Nakano-ku
Kids Plaza Yato,” “Kita-ku Sakura Club No. 1” and “Kita-ku Sakura ClubNo. 2,” which are school clubs, and “Sayama City Chuo Children's
House,” which is a children’s house, on March 31, 2021, due to the
expiration of respective contract periods.

No. of Facilities Operated as of
the End of September 2021
Nursery Schools: 211
School Clubs: 81
Children’s houses: 11
Total: 303

Tokyo:
3 licensed nursery schools
Asc Kami-Shakujii Nursery SchoolAsc Kanamachi Nursery SchoolAsc Higashikasai Nursery School No. 2

Tokyo:
8 school clubs and children’s houses
Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 2
Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 3
Mitaka City Rokusho School Club A
Niji-iro Kids Club
Bancho Elementary School After School No. 1
Bancho Elementary School After School No. 2
Bancho Elementary School After School Kids’Club (Play school)Jindaiji Children’s House© 2021 JP-HOLDINGS, INC.

25

No. of Facilities Operated as of the End of September 2021
No. of Facilities Operated by Region

Operate 301 facilities as of the End of September 2021

TohokuHokkaido

Licensed nurseryschools: 11

Kanto

Kinki

Licensed nurseryschools: 9
KyushuOkinawa

Licensed nurseryschools: 5
Company-led
nursery school: 1

Licensed nurseryschools: 3

Chubu

Licensed nurseryschools: 9
School clubs: 3
Children’s houses: 6

Licensed nursery schools: 156
Non-licensed nursery schools: 13
Other non-licensed nursery schools: 4
School clubs: 78Children’s houses: 5211 nursery schools, 81 school clubs, 11 children’s houses© 2021 JP-HOLDINGS, INC.

26

3

New Medium-Term
Management Plan andMeasures for the Second Half

27

Medium-term
management plangoals

Long-term management
visionTarget IndicesWe aim to develop “nursery schools and facilities thatwould be selected by customers.”(To develop nursery schools, facilities, and an enterprise that will be selected continuously byguardians, municipalities, training institutions, and staff members)

Improvement/expansion of existing businesses, newbusinesses, and capital/business alliances
Target consolidated net sales: 100 billion yen

To improve profitability at existing facilities and further improve the quality ofchildcare support
To create new value while considering the changes in society and the businessenvironment(To reform the management structure and implement growth strategies in the 3 years from FY3/22 to FY3/24)

3rd year of the medium-term management plan (final fiscal year)
For FY3/24, we aim to achieve net sales of 35,200 million yen and an
ordinary income of 3,500 million yen.
(*To revise annual goals with the rolling method)*We changed the presentation methods in the first quarter of FY3/22.
© 2021 JP-HOLDINGS, INC.

28

Activities for Achieving Consolidated Net Sales of 100 Billion Yen
We will evolve our existing businesses and cultivate new(Net sales)
長Unit: 100 million yen
domains for further growth.
期
New business:
経営
50 billion yen●Members-only
platform businessビ●Sale
ジ of existing programs and training●Business related to child-rearing andョ of businesses in the same industry
M&A●Overseasbusiness mainly in Asia
ン
●Creation of new value in cooperation
with Gakken HD

中
期
経
営
目
標

1,000

Strengthening of the sales business
utilizing our know-how
Creation of new businesses utilizing the economies
of scale
Digital business and members-only platform

M&A/business alliance/overseas business+

Existing business:
50 billion yen●Cooperation between nursery schools andschool clubs (to increase our dominance)●Development of nursery schools andfacilities that would be selected bycustomers●Enrichment of digital and learning
programs

New business/M&A

500

Establishment of new school clubs and children’s houses
To increase the number of facilities two times to 200

Improvement of profitability and increase ofoperation rate of existing businesses

Existing businesses (nursery schools, school
clubs and children’s houses)
FY3/22© 2021 JP-HOLDINGS, INC.

29

Medium-Term Management Plan (FY3/22 to FY3/24)
⦿Concept of the medium-term management plan
“Ideal state” 3 years from now

Plan for the next fiscal year

Changes in the businessenvironment

Formulation of the mediumterm management plan for
the following years

A medium-term management plan is formulated every term, while considering
the changes in the situation.
FY3/22

Rolling method
Method of revising theplan every term, whileconsidering the changes
in the businessenvironment, etc.

Medium-term
management
plan 2022
Medium-term
management
plan 2023

Medium-term
management
plan 2024

FY3/23

FY3/24

FY3/25

FY3/262022～2024
2023～2025

2024～2026© 2021 JP-HOLDINGS, INC.

30

Medium-Term Management Plan (Goals)
⦿Plans for net sales and ordinary incomeWe aim to grow them steadily for 3 years. The compound average growth rate (CAGR) in that period is 1.7%
for net sales, and 6.4% for ordinary income.

Net sales plan

Ordinary income plan

(Million yen)

(Million yen)
Ordinary
incomeFY3/21

FY3/22

FY3/23

FY3/24

FY3/21

Ordinary income rate

FY3/22

FY3/23

FY3/24© 2021 JP-HOLDINGS, INC.

31

Changes in the External Environment
and Measures for the Second Half

32

Business Environment Surrounding our Company I◆Changes in thesurrounding environment
⦿Significant and sharp drop in
the number of births
⦿Impact of economic
stagnation on subsidies
⦿Change in the subsidy
system◆Management issues
⦿Improvement in profitability
and efficiency
⦿Reform of mindsets of onsite workers
⦿Establishment of growthstrategies

Predicted changes in the environment
in the coming 3 years

⦿Intensification of thecompetition for acquiring
children⦿Closure of more nurseryschools
⦿Acceleration of restructuringof childcare enterprises
⦿Outsourcing of operation of
more public nursery schools to
private enterprises
⦿Change of social welfare
corporations due to the amended
Social Welfare Act
⦿Establishment of Agency forChildren and new items for
subsidies© 2021 JP-HOLDINGS, INC.

Improvement in corporate value/SustainablegrowthCurrent situation

Develop nursery schools and facilities
that would be selected by customers

We will evolve our existing businesses and cultivate new domains for further growth
while considering the changes in the business environment.

33

Business Environment Surrounding our Company II
Thanks to the national and local governments’ measures for reducing children on waiting lists for childcare
services, the child-raising support business is growing, but there remain many issues to be addressed,
because this business model depends on the problem of the declining birthrate and subsidies.

Ｓtrengths■Business operation throughout Japan, including
Hokkaido and Okinawa■Efficiency by taking advantage of the large number offacilities and the economies of scale■High profit margin, without relying on subsidies
provided at the time of opening nursery schools■Securing of safety and reliability

Ｏ pportunities■Business synergy with Gakken Holdings■Establishment of Agency for Children and new
subsidies■To undertake the operation of more public nurseryschools

Ｗ eaknesses■Business model that depends on subsidies■Chronic shortage of nursery staff■Trend of COVID-19

Ｔhreats■Steep drop in the number of births■Decline in needs for childcare, due to the decrease ofchildren■Revision to systems and policies of national andlocal governments© 2021 JP-HOLDINGS, INC.

34

Major Strategies in the Second Half
To adapt to the social environment and differentiate our businessfrom competitors’ mainly with digital technologies
Value creationfrom theperspective ofcustomers×

Establishment ofcompetitive advantages

Utilization ofdigitaltechnologies

×Creation of new
business models!

of nursery schools➡ ●Development
and facilities that would be selected bycustomers●Increase of new contact points withcustomers●Differentiation from competitors●Interactive communication●Enrichment of contents and services© 2021 JP-HOLDINGS, INC.

35

Measures in the Second Half (1)Thorough removal of unnecessary tasks▷Systematization and reform of systems for streamlining
the operations at the head office and each workplaceTo improve on-site systems for placing orders andhandling repairsTo remove unnecessary tasks thoroughly through thereform of organizations and the streamlining of management
Optimization of staffing in each section▷To properly allocate personnel by streamlining
operations and removing unnecessary tasks
Proper allocation of on-site personnel
Strengthening of cooperation with on-site workers byreallocating head office’s staff through the streamlining ofmanagement and systematization

Improve
profitability

Improve
operational
efficiency

Systematization
Data analysis andimprovement in
operational efficiency

Curb turnoverrateRestructuring of our subsidiaries▷To clarify the head office’s functions and roles of Japan
Nursery Service and develop an organization and a system
while separating their tasks from on-site work
▷For improving operational efficiency, Japan Nursery
Service and Amenity Life will be merged in Apr. 2022.

Optimizationof staffing

System forconcentrating onchildcare and childrearing

Improve
operational
efficiency

Improve thequality

Actualize a compact head officeBusiness restructuring/
Streamlining ofmanagement© 2021 JP-HOLDINGS, INC.

36

Measures in the Second Half (2)Improve profitability in the child-raising support business
Enhance the cooperation between nursery schools andschool clubsImprovement in profitability in the child-raising support
business▷Revenues have increased in each block, but we will try toshare best practices among blocks, to further fix disparities inrevenues in each block or at each nursery school.
▷To promote the sale of real estate we own (facilities thatown land) and improve the efficiency of use of assets
To undertake more projects for schools clubs andchildren’s houses for expanding our dominance▷To undertake more projects for schools clubs and children’shouses mainly in the vicinity of our nursery schools. We
support childcare from babyhood through school-age. We will
increase the number of schools clubs and children’s houses
two times to 200.
▷We will facilitate the exchange between the management
division and the staff of facilities from the aspects of childcare
and child-rearing, and implement measures unique to ourcompany.
Development of personnel who will support nurseryschools and facilities (reform of our awareness anddevelopment of next-generation leaders)▷Enrichment of the training for each class, to improve thelevel of personnel at the head office

Area dominance strategy

Achievement ofour dominanceTo support childcarefrom babyhood toearly childhood toschool-age in our area

Personnel development
Over 300 training
programs

Face-to-facelectures
Online training© 2021 JP-HOLDINGS, INC.

37

Measures in the Second Half (3)Develop nursery schools and facilities that would beselected by customers
Online facility tours/enrichment of external announcements▷To find participants in facility tours online.
To produce website-based explanatory materials for facility tours,
and advertise the features of each nursery school, common
programs, and differentiated characteristics of operation▷To renew our website from the viewpoint of guardians, andadvertise our advantages
Development of the forte of each nursery school based on
the survey on competition in the neighborhood and PR▷Popularization through joint events with local communities
and programs of each nursery school▷Enhancement of PR activities of each group company andeach nursery school (dissemination of more information via
websites and SNS)
Development and adoption of attractive programs, andenhancement of PR▷To advertise the features of each nursery school and ourunique programs in websites and facilities▷Collaborative lessons with other companies (swimming,
karate, etc.)
Education on food and agricultureOriginal online programs for English, gymnastics,
eurhythmics and dance▷In addition to the dispatch of lecturers, we will increase
learning opportunities via our original programs.

Digitalization
Online facility
tours
Nurseryschools
Guardians

Upgrade of our
websiteOnlinedistribution ofvideosEnglish, gymnastics,
eurhythmics and dance© 2021 JP-HOLDINGS, INC.

38

Measures in the Second Half (4)Membership business

Implement growth strategies
Promotion of early childhood learning and new programs▷Expansion of early childhood learning programs
To increase the number of facilities of Mojikazu Land from62 to 100.
▷Development of new programs and improvement ofservices for infants
Adoption of dance and fine arts programs
Increase in recognition of Baby Asc (a program for infants)
Value creation based on the business alliance with
Gakken▷Examination and promotion of new value creation programs▷Cooperation in reducing costs, including joint purchase
Development and promotion of new businesses▷Creation and launch of a platform business
To offer new business by adopting the membership systemfor children▷Business alliances with other enterprises and M&A toachieve the top sharePromotion of business alliances and M&A with othercompanies in the same industry
Business alliances with other businesses and M&A ofbusinesses related to child-rearing

Membership

Various worries ofguardians

Provisionofservices

Supplyofproducts

About 16,000 childrenChild-rearing
generation

Children of ourgroupChild-rearing
platform

Provision of solutions© 2021 JP-HOLDINGS, INC.

39

Business Portfolio
Expansion of new business domains for responding to the changes in the market and forming abusiness alliance with Gakken
High
Brand
development

Utilization of Gakken’s
contents/collaborative
development
Online program*Existing nurseryschools and marketing

Growthpotential

Synergy for further growthCreation of new value

Expansion of business forcreating new value

Increase of contact points withcustomers

Training of lectures
for early childhood
learning

EnglishExercise
Eurhythmics
DanceDevelopment of new programs linked withthe contents of Gakken (English, etc.)*Existing nursery schools and marketing
Cooperation with the facilities for elderly
people(Exercise and eurhythmics for seniors)

New business(improvement)

Membershipplatform(Solution)

Training
business

To make pupils,
guardians, and family
members lifelong
customers
Development Sale of (online) teachingand sale of materials
products *Existing nursery schools andmarketing

Developmentof complex
facilities

Childcare
supportbusiness●To undertake more
projects for school clubs
and children’s houses
Implementation of early childhood
learning programs
Online operation

Existing business

Low

Early
childhoodlearning
programContribution torevenuesHigh© 2021 JP-HOLDINGS, INC.

40

4

APPENDIX41

[Supplementary Material] Environment Surrounding Childcare Support
Environment surrounding childcare support
The number of children on waiting lists decreased steadily, and it has dropped over 50% in the past 3 years. As the situation varies among regions, the importance of
support according to regional characteristics will increase.
(No. of children on waiting lists as of April 2020: 12,439, down 4,333 year on year). Prefectures with many children on waiting lists: Saitama, Chiba, Tokyo, Kanagawa, Osaka, and Hyogo
Establishment of a system for social welfare coordination promotion organization
It will become possible to form “a social welfare coordination promotion organization,” a non-profit organization comprising mainly of social welfare corporations (which can lend funds,
recruit staff, and jointly purchase equipment and goods).
The ratio of employed women is rising. As it is estimated to reach 82% in 2025, it will be necessary to increase childcare centers.
(Ratio of employed women in April 2020 was 77.7%.)
The decrease of children accelerated by COVID-19 (The number of births will drop significantly in 2021.)
The number of births was 848,000 in 2020, and is estimated to decrease 7.5% to 784,000 in 2021. The decrease of children is projected to progress 10 years earlier than initially estimateddue to the spread of COVID-19.
In 60% of 23 wards of Tokyo and ordinance-designated cities, the number of applications for entry to licensed nursery schools fell below the capacity. To prevent the spreadof COVID-19, people tend to refrain from entrusting a nursery school with childcare.
In 17 cities accounting for 60%, the rate of enrollment is below 100%. The number of such wards/cities almost doubled from last year (8 cities). There is the trend of extension of achildcare leave for decreasing the risk of infection.
The government plans to establish the Agency for Children, which will take measures in an unified manner, for the ideal administration for children.
Considering the situation in which nursery schools are supervised by the Ministry of Health, Labour and Welfare, kindergartens by the Ministry of Education, Culture, Sports, Science andTechnology, and licensed children’s school by the Cabinet Office, the government plans to unify the management of them.

(1) Estimated number of births (Source: Japan Research Institute)
Estimated number of births[Prediction of the number ofbirths]850,000 in 2020
780,000 in 2021

(2) Application ratio of licensed nursery schools as of April 2021
April 2021
April 2020 2021年4月
2020年4月
Area
YoY
前年差
地区
(ward)
change(times)(倍)(倍)(times)Setagaya
世田谷区
1.64
1.55
-0.09 Arakawa
荒川区
品川区
1.41
1.32
-0.09 Nakano
中野区
ShinagawaBunkyoEdogawa
江戸川区
1.31
1.29
-0.02 文京区
Taito
台東区
1.41
1.26
-0.15 Chiyoda
千代田区
Nerima
練馬区
1.31
1.16
-0.15 Minato
港区
Sumida
墨田区
1.06
1.08
0.02 Katsushika
葛飾区
Adachi
Ota
大田区
1.21
1.06
-0.15 足立区
中央区
1.33
1.05
-0.28 Toshima
豊島区
Chuo
Itabashi
板橋区
1.11
0.98
-0.13 Meguro
目黒区
Kawasaki
Suginami
杉並区
1.06
0.98
-0.08 川崎市
Shibuya
渋谷区
1.13
0.95
-0.18 Saitama
さいたま市
Koto
江東区
0.97
0.93
-0.04 Yokohama
横浜市
Shinjuku
新宿区
1.01
0.91
-0.1 Sagamihara
相模原市
Area
地区
(ward)

Kita
北区

1.02

0.90

-0.12 Average
平均

April 2020 2021年4月
YoY
April 2021
2020年4月
前年差change(times)(倍)(倍)(times)
1.00
0.90
-0.1
1.10
0.85
-0.25
1.00
0.83
-0.17
0.82
0.81
-0.01
0.91
0.77
-0.14
0.84
0.74
-0.1
0.74
0.73
-0.01
0.79
0.71
-0.08
0.85
0.66
-0.19
1.23
1.10
-0.13
1.33
1.03
-0.3
1.06
0.96
-0.1
0.91
0.82
-0.09

1.09

0.98

© 2021 JP-HOLDINGS, INC.

-0.11

42

[Supplementary Material] Scale of the Child-rearing Support-related Market●In fiscal 2020, the scale of this market shrank sharply due to COVID-19.
●Childcare-related services performed well, thanks to the policies for making kindergartens and nurseryschools charge-free and reducing children on waiting lists.
Scale of the Market Related to Child-rearing and Childcare[100 million yen]
Scale of the market related to child-rearing[100 million yen]

Scale of the market of childcare-related service
Nursery school

After-school childcare

Baby-sitting

Preschool

Childcare-related service

Source: Yano Research Institute Ltd.’s General Marketing in the Market for Children: Annual (2020 Issue)© 2021 JP-HOLDINGS, INC.

43

[Supplementary Material] Variations in the Number of Children on Waiting Lists andthe Ratio of Children Enrolled in Nursery Schools, Etc.
● The total capacity of nursery schools, etc.: 2.97 million children, up 79,000 children from the previous year
●The number of children enrolled in nursery schools, etc.: 2.74 million, up 58,000 from the previous year
● The number of children on waiting lists: 12,439, down 4,333 from the previous year
Variations in the number of children on waiting lists for andthe ratio of children enrolled in nursery schools, etc.
(Children)
No. of children on waiting lists
Ratio of children enrolled in childcare facilities (overall)(Children)

Situation of the total capacity of nurseryschools, etc. and the number of children
enrolled
No. of nursery schools, etc.
Total capacity
No. of children enrolled

Ratio of children enrolled in childcare facilities (1 or 2-year-old children)

Source: Ministry of Health, Labour and Welfare’s Summary of the Situation of Nursery Schools, Etc.

© 2021 JP-HOLDINGS, INC.

44

[Supplementary Material] Current Waiting List Situation
⦿The number of children on waiting lists as ofApr. 1, 2021 is 5,634 (6,805 decrease YoY).
The problem of children on waiting lists
remains serious. This is especially so in theTokyo metropolitan area and prefectures
where major cities (e.g. ordinancedesignated cities) are located.

National Waiting List Map (April 1, 2021)

都道府県
Prefecture

No. of

待機児童数
Children on

待機児童率ChangeWaiting List
Person人

Current as of April 1, 2021

No of Prefectures

0

(12)

1 or more but less than 100(21)

100 or more but less than 500(10)500 or more but less than 1,000(4)1,000 or more

(0)Note: Prefectures include ordinance-designated cities and central cities.

Source: Ministry of Health, Labour and Welfare’s Nursery School Situation Summary (April 1, 2021)

北海道
青森県
岩手県
宮城県
秋田県
山形県
福島県
茨城県
栃木県
群馬県
埼玉県
千葉県
東京都
神奈川県
新潟県
富山県
石川県
福井県
山梨県
長野県
岐阜県
静岡県
愛知県
三重県
滋賀県
京都府
大阪府
兵庫県
奈良県
和歌山県
鳥取県
島根県
岡山県
広島県
山口県
徳島県
香川県
愛媛県
高知県
福岡県
佐賀県
長崎県
熊本県
大分県
宮崎県
鹿児島県
沖縄県
計

134
0
58
340
22
0
141
193
34
14
1,083
833
2,343
496
3
0
0
0
0
46
0
122
155
81
495
48
348
1,528
201
35
0
0
403
39
17
61
64
55
28
1,189
49
0
70
10
14
322
1,365
12,439© 2021 JP-HOLDINGS, INC.

％

0.15
0.00
0.19
0.76
0.10
0.00
0.40
0.32
0.08
0.03
0.80
0.70
0.73
0.29
0.00
0.00
0.00
0.00
0.00
0.09
0.00
0.18
0.09
0.20
1.34
0.08
0.18
1.31
0.76
0.17
0.00
0.00
0.82
0.06
0.06
0.36
0.28
0.21
0.13
0.94
0.20
0.00
0.12
0.04
0.04
0.75
2.19
0.44

45

[Supplementary Material] Current Nursery School Teacher Shortage Situation
 The ratio of job openings to job applicants for nursery school teachers is decreasing.
However, there is a continuing shortage of nursery school teachers across Japan.
(National average as of September 2021: 2.58 times)
 Jobs to applicants ratio of Tokyo had the trend of decrease at 2.70 as of Apr. 2021, butturned to increase in May 2021 and stood at 3.46 as of Sep. 2021.
Effective Opening to Application Ratio for Nursery School Teachers (X)Nationwide

Tokyo

Sep.
3.46
●

●

Sep.
2.58

Source: Ministry of Health, Labour and Welfare Employment Security Bureau’s General Job Placements (Report on Employment Service)© 2021 JP-HOLDINGS, INC.

46

[Supplementary Material] Recruitment of Nursery School Teachers
FY3/15

Nursery School
Teacher

Non qualified

FY3/16

FY3/17

FY3/18

FY3/19FY3/21Joined on
the end of Spt.

FY3/20New
Graduates

178

197

247

276

248

182

Mid-career
employment

219

241

327

325

269

292

199

New
Graduates

-

23

32

46

26

9

7

166
Joined on Apr. 1, 2021

*After joining JPHD, non qualified graduates are expected and assisted to acquire nursery school teacher qualification. Started this recruitment style from FY2016.
*Includes seconded employees to associated companies

Trend of Employee Numbers in Childcare Support Business(Persons)(*Includes employees of school clubs staffs, nutritionists, etc. other than nursery school teachers)
Employees
Part-time workers

FY3/08

FY3/09FY3/10FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20© 2021 JP-HOLDINGS, INC.

FY3/2147

[Supplementary Material] Changes in the Number of Facilities Operated and the
Number of Children Accepted to Nursery Schools
FY 3/11

FY 3/12FY 3/13

FY 3/14

FY 3/15FY 3/16

FY 3/17

FY 3/18

FY 3/19

FY 3/20

FY 3/21

Sep.2021

Licensed Nursery Schools(Public-private management)

10

11

14

16

14

10

10

11

12

12

11

11

Licensed Nursery Schools(Private management)

43

61

71

85

102

118

136

148

160

171

177

182

2

0

0

0

Tokyo Licensed Schools

26

26

26

26

26

26

23

21

21

20

19

13

Company-led Nurseries

0

0

0

0

0

0

0

0

2

2

2

1

Non-licensed Municipality Authorized

4

4

4

4

4

1

0

0

0

0

0

0

Small-scale Nursery Schools

Non-licensed Othernon-licensed

0

0

0

0

0

4

3

3

3

4

4

4

37

39

40

43

46

55

63

71

72

72

77

81

Children's Houses

9

7

8

8

8

10

12

12

11

11

11

11

Private School Clubs

0

0

0

0

0

0

4

5

5

4

0

0

School Clubs

Overseas Facility
Total
Nerseries Total

0

0

0

0

0

0

0

1

1

1

0

0

129

148

163

182

200

224

251

272

289

297

301

303

83

102

115

131

146

159

172

183

200

209

213

211

*We reviewed the count by management structure in the 2Q of FY3/16 and changed three licensed schools (public-private management) to other non-licensed nursery schools.

TREND OF NURSERIES AND CHILDREN
Non-licensed Othernon-licensed

Number of facilities

Non-licensed Municipality Authorized

Number of Children

300

14,058 14,350
12,375250

Company-led Nurseries
10,461200

Licensed Nursery Schools(Private management)
Licensed Nursery Schools(Public-private management)
Overseas Facility

18000

16000
14000

11,192

12000
10000

8,133

150
100

15,581 15,649

9,350

Tokyo Licensed Schools
Small-scale Nursery Schools

15,323

6,956

8000

5,500

6000
4000

50

2000

0

0
FY 3/11

FY 3/12FY 3/13

FY 3/14

FY 3/15FY 3/16

FY 3/17

FY 3/18

FY 3/19

FY 3/20

FY 3/21

Sep.2021© 2021 JP-HOLDINGS, INC.

48

[Supplementary Material] Consolidated Results (Highlights)
FY3/17

FY3/18

FY3/19FY3/20FY3/21

Net sales (million yen)

22,866

26,,945

29,64732,16933,500Operating income (million yen)

1,349

1,469

1,880

1,989

2,857

Ordinary income (million yen)

1,350

1,469

1,920

2,003

2,947

Net income attributable to ownersof parent (million yen)

661

910

1,071

1,122

537

Net income per share (Yen)

7.87

10.70

12.44

12.81

6.15

*Net sales and operating income are the amounts after the reclassification of presentation methods.

Net sales(million yen)

Operating income/Ordinary income(million yen)

Net sales

OperatingincomeOrdinary
income© 2021 JP-HOLDINGS, INC.

49

[Supplementary Material] Consolidated Results (Balance Sheet/Statement of Cash Flows)

FY3/17

FY3/18

FY3/19FY3/20FY3/21

Total assets (million yen)

24,00225,75828,255

26,122

29,740Net assets (million yen)

6,854

7,756

8,950

9,636

10,007

Shareholders’ equity ratio (%)

28.5

30.1

31.7

36.9

33.7

FY3/17

FY3/18

FY3/19FY3/20FY3/21

Cash flows from operating
activities (million yen)

1,878

1,865

1,829

2,320

2,469

Cash flows from investing
activities (million yen)

-3,305-1,292

-940

418

190

Cash flows from financing
activities (million yen)

1,646

-135

1,475

-3,3492,155

Year-end balance of cash andcash equivalents (million yen)

4,017

4,455

6,816

6,206

11,020© 2021 JP-HOLDINGS, INC.

50

[Supplementary Material] Dividends
The basic policy of our company is to continue paying a performance-linked dividend with a payout ratio ofaround 30% while maintaining the necessary internal reserves for future business development and tostrengthen our management structure.
FY3/17

FY3/18

FY3/19FY3/20FY3/21

Amount of dividend pershare (yen)

2.50

3.50

3.70

3.90

3.90

Payout ratio (%)

31.8

32.7

29.7

30.4

63.4

© 2021 JP-HOLDINGS, INC.

51

Adjustments after the Change in the Presentation Methods
Adjustments after the change in the presentation methods●With regard to subsidies, etc. received from local governments for rental company housing for nurseryschool teachers, the amount was previously recorded as "Subsidy income" under non-operating income, butfrom the first quarter of the current fiscal year, such subsidies, etc. are now recorded as "Net sales."● This change in presentation is due to the fact that the qualitative importance of such subsidies, etc. to thechildcare business has increased, and that, as a result of confirming and organizing the subsidy system related to thechildcare business as a result of investigating and studying the "Accounting Standard for Revenue Recognition,” wemade the judgment that it would be possible to present the actual status of the business more appropriately if therelevant amounts were recorded in the same category as other subsidies. Due to this change in presentation,
reclassifications have been made for the first quarter of the previous fiscal year.

© 2021 JP-HOLDINGS, INC.

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Forecast Precautions
This document contains forecasts about the future. However, these are predictions thathave been made by our company based on the information available at the time of
publication. The reality may be significantly different from our predictions due to economic
conditions and market trends. Furthermore, this document is not intended to solicit
investment. We are under no obligation to amend or change the information pertaining toforecasts contained in this document even if we obtain new information in the future.

Inquiries:
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JP-HOLDINGS, INC. Tokyo Office
Corporate Communications & Investor Relations Div.
TEL: 03-6433-9515 e-mail : jphd_pr@jp-holdings.co.jp

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