www.nichiigakkan.co.jp

NICHII GAKKAN COMPANY

Financial Results Briefing Document
for the First Three Months of the Fiscal Year Ending March 31, 2014
August 9, 2013

Today’s Contents

1. Overview of Financial Results for the First Three Months of the Fiscal YearEnding March 31, 2014...P 3Operating Results for the First Three Months of the Fiscal Year Ending March 31, 2014...P 4
Financial Results Highlights for the First Three Months of the Fiscal Year Ending March 31, 2014
Consolidated Net Sales and Operating Income by Business for the First Three Months of the...P 5Fiscal Year Ending March 31, 2014...P 6(4) Major Factors for Changes in Net Sales (year on year)...P 7(5) Major Factors for Changes in Operating Income (year on year)...P 8-11(6) Segment Highlights for the First Three Months of the Fiscal Year Ending March 31, 2014(7) Education Business Highlights by Brand for the First Three Months of the Fiscal Year Ending...P 12March 31, 2014...P 13(8) NYU-SCPS-ALI Tokyo Center...P 14(9) Status of Child Care Business...P 15(10) Strengthening of the System for the Activation of the Organization
(1)
(2)
(3)

2. Earnings Forecasts(1)(2)

FY2014 Earnings Forecasts
FY2014 Earnings Forecasts by Business

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

...P 17...P 18

FY2014 1Q Results Briefing

1Overview of Financial Results
for the First Three Months ofthe Fiscal Year Ending March 31, 2014

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing

2Operating Results for the First Three Months of the Fiscal Year Ending March 31, 2014

(Unit: million y en)

FY2014 1Q

FY2013 1Q
AmountNet Sales

AmountYear on year

65,644

68,161

3.8%

1,863

1,727

(7.3%)

2.8%

2.5%-1,673

1,367(18.3%)

%

2.5%

2.0%

-Net Incom e

613

1,047

70.8%

%

0.9%

1.5%

-3,202

3,223

0.7%

4.9%

4.7%

-Operating Incom e%

Ordinary Incom e

EBITDA%

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing

3

Financial Results Highlights
for the First Three Months of the Fiscal Year Ending March 31, 2014
The 6thconsecutive year of revenue growth with record-breaking net sales
6期連続となる過去最高四半期売上高を更新- The number of customers of the long-term care business and subsidiaries (Nichii Care Palace and GABA)

Both the revenue and the profit of the long-term care business increased - strong performance of facility care services - Nichii Home and other facility care services boosted net sales.
[Financial results of facility care services (unit: million yen)]
FY2013 1Q

FY2014 1Q

Growth rate

Net sales

11,348

12,223

7.7%

Gross profit

1,701

2,225

30.8%
Nichii Home Edogawa(opened in November 2012)

Continuous implementation of strategic investment (language education business and child care business)- COCO Juku in all the prefectures (79 classrooms * increase of 50 classrooms as compared to the end of the same month of theprevious year)- Promotion of the child care business, operation of certified child care centers, in-office child care centers, etc.
(68 centers * increase of 23 centers compared to the end of the same month of the previous year)
Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing

4Consolidated Net Sales and Operating Income by Businessfor the First Three Months of the Fiscal Year Ending March 31, 2014
(Unit: million yen)

Net sales

FY2013 1Q

FY2014 1Q (Result)Year on year%

Medical Support25,871

26,314

1.7%

Long-term Care

33,71835,461

5.2%

Health Care

943

827(12.2%)

Long-term Care
+ Health Care

34,66236,288

4.7%

Education

5,087

5,466

7.5%

Other

487

382(21.6%)

Eliminations/ Corporate

(463)

(291)

-65,644

68,161

Total

3.8%(Unit: million yen)

Operating income

FY2013 1Q

FY2014 1Q (Result)Year on year%

Medical Support

2,086

1,855(11.1%)

Long-term Care

2,453

3,149

28.4%

Health Care

1857(95.7%)

Long-term Care
+ Health Care

2,638

3,157

19.7%

(827)

(1,169)-33(9)-Eliminations/ Corporate(2,068)(2,107)-Total

1,863

1,727

(7.3%)

Education
Other

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing

5Major Factors for Changes in Net Sales (year on year)
Increase(Unit: million yen)

Decrease

70,000+379+1,742

68,161Eliminations/Corporate

FY2014
1Q

-105

-115

+443

+171

65,64465,000FY2013
1Q

MedicalSupport

Long-termCare

Health Care

Education

Other

Increase in revenue of ¥2,516 million year on year owing to the strong performance of the core businesses,
including increased contracts with hospitals, increased users of home care and facility care services,
and increases in the net sales of existing courses and language courses

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing

6Major Factors for Changes in Operating Income (year on year)
Increase(Unit: million yen)

Decrease

2,500+695-177

2,000

1,863-341-42-2311,727-38

1,500

FY2013
1Q

MedicalSupport

Long-term
Care

Health Care

Education

OtherEliminations/Corporate

FY2014
1Q

Long-term care business continued to increase profits owing to an increase in users and further operation efficiency
Subsidiaries contributed to profits (increase of ¥250 million for Nichii Care Palace and increase of ¥50 million for GABA)

介護部門の利用者数の増加、教育部門のＧＡＢＡのクライアント増等、各部門増収 前年同期比11,322百万円の増収

Decrease in profit of ¥136 million year on year, mainly due to strategic investment by the education business (language business)

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing

7Segment Highlights for the First Three Months of the Fiscal Year Ending March 31, 2014
(Medical Support)
Consolidated net sales and operating income(year-on-year change)

Net sales:¥26,314 million (+1.7%)

Operating income: ¥1,855 million (-11.1%)
26,31425,871(+1.7%)

POINT
Solid performance in the hospital businessowing to the focus on the acquisition of
new contracts and sales activities
through the expansion of the scope of work
Growth rate for net salesof the hospital business

2,086

1,855
(-11.1%)

Net sales

2.4%- Profits declined temporarily due to anincrease in labor costs arising from theoperation of a large-scale hospital.

Operating income

Net sales related to hospitals and number ofcontracts (year-on–year change)
23,35222,806+- The growth rate of net sales isincreasing, driven by the performanceof the hospital business.

(+2.4%)

1,936

1,929
(-0.4%)TOPICSX Expanded management support services.
Focus on education/development of personnel toserve the management of medical practice throughthe introduction of a training system in collaboration
with Tama University
X Preparation for developing a clinic in Singapore
To be opened in late August

Net sales

Number of contracts(as of the end of June)

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing8Segment Highlights for the First Three Months of the Fiscal Year Ending March 31, 2014
(Long-Term Care and Health Care)
Consolidated net sales and operating income(year-on-year change)
Long-term Care + Health CareNet sales:¥36,288 million

POINT(+4.7%)

Record-breaking profit owing toenhanced facility efficiency achieved
through an increase in users

Operating income: ¥3,157 million (+19.7%)
36,28834,662(+4.7%)- Efficient operation of home-care facilities

8.7%- Users of facility care services increased
steadilyLong-term careand health care

Number of users as of June 30: 10,029

3,157(+19.7%)

2,638

Net sales

Operating income

Number of users of home care and facility careservices (year-on–year change)* As of June 30, 2013

142,050
138,884

Operating margin(+2.3%)

10,029(+6.1%)

9,448

Up 6.1% year on year

TOPICSX Strengthening of service initiatives meeting local demand
Offering of day care addressing dementia (shared type)and home nursing care services

X Strengthening of offering of general housekeeping services
and health care (PB) products
X Promotion of preparation for business expansion in Beijing
through establishment of the China project

Home care services

Facility care services

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

* The China project was promoted to the China Operational Division of Nichii
Gakkan on August 1.
FY2014 1Q Results Briefing

9Segment Highlights for the First Three Months of the Fiscal Year Ending March 31, 2014
(Long-Term Care)

Establishment of facilities
End of June 2012

End of June 2013

End of March 2014

Care plan746

782 (+36)

782 +ɑHome-visit care971

1,000 (+29)

1,052Day care331

357 (+26)

383

Home nursing care

3963 (+24)

100

Hohoemi242

249 (+7)

262

Kirameki

4651 (+5)

58

Nichii Home

5052 (+2)

55

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing 10

Segment Highlights for the First Three Months of the Fiscal Year Ending March 31, 2014
(Education)
Consolidated net sales and operating income(year-on-year change)

Net sales:¥5,466 million

POINT(+7.5%)

Operating income: -¥1,169 million (-¥827 million)

Continued long-term strategic investmentin the language business

5,466
COCO Juku classrooms(+7.5%)

5,087

79 in Japan-827

Offered in allprefectures- Opening of six new COCO Juku classrooms- Continued aggressive promotion activities- Revenue increased owing to steadyincrease in students of GABA andcontinuing attendance at Home Helper
Level 2 Courses from the previous period

Net sales-1,169(–)

Operating income

TOPICSX Launch of a new brand called COCO Juku Junior- The new service is provided in 73 classrooms

Net sales by business (year-on-year change)
2,707

2,639
(+13.9%)2,673(+1.3%)

2,317

Language education(COCO Juku + GABA)

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

X Establishment at COCO Juku of contact for support
for studying abroad
X Offering of courses in accordance with the review of thehealth care workers’ qualification system
Commencement of provision of basic training course for care workers

ExistingPreparation for offering health care practice courses(to commence in July)FY2014 1Q Results Briefing 11

Education Business Highlights by Brand
for the First Three Months of the Fiscal Year Ending March 31, 2014

FY2013 1QNichii(existing brands)

Year onyear

FY2014 1Q

Net sales

2,673

2,707

1.3%Operating income(213)266‒7184‒

Operating income(981)(1,809)‒Net sales

2,310

2,454

6.3%

Operating income287

337

17.5%

Net sales

COCO Juku

GABACopyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing 12

NYU-SCPS-ALI Tokyo Center
English Program of New York University School of Continuing andProfessional Studies to be offered in Tokyo
NYU-SCPS AMERICAN LANGUAGE INSTITUTE TOKYO CENTER
New York University School of Continuing and Professional Studies
American Language Institute (ALI) Tokyo Center
to be opened on September 26

PROGRAMS

Level 22, Tower A, Shinagawa Intercity, 2-15-1,Konan, Minato-ku, Tokyo, 108-6022, Japan

OPEN CAMPUS

PROFESSIONALENGLISH
PROGRAMCOLLEGEPREPARATORYPROGRAMCOMPREHENSIVEENGLISH
PROGRAMThe real-life language ofbusiness for the international
businesspersons

Prepares students andbusinesspersons to apply for,gain admission to, andsucceed in U.S. colleges anduniversities

A comprehensive program
designed for beginner- toadvanced-level students andbusinesspersons

Open campus events will be held from August.

- on the 3rd, 4th, 11th and 25th of August -The open campus events will provide practical lectures for business people, English teachers, and people intending to study abroad.
Explanations of the programs, trial lessons, campus tours and individual counseling regarding taking courses will be provided asnecessary.
Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing 13

Status of Child Care Business
Consolidated net sales and operating income(year-on-year change)

Net sales:¥371 million(+61.2%)

Operating income: -¥148 million (-¥141 million)

POINTExpanding the size and scope of operations throughthe proactive development of the child care business
Promotion of high-value-added services
Active offering of child care services
Increase of 23 centers year on year

371(+61.2%)230

Net sales-141-148(–)

Managed child careservices- Certified child care centers:

3- Directly managed child care centers:

1

68 centers- In-hospital and in-office child care centers: 4in total- Child care support, etc.:

7- Dispatch of child care specialists:

8Operating income
Net sales by business (year-on-year change)
306

TOPICSX High-value-added services through offering English
conversation lessons in collaboration with COCO Juku.

(+66.7%)6546183(+40.0%)

In-hospital child care

Began to be offered in full scalefrom July
Expansion at managed child carecenters as necessary

In-office child care

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing 14

Strengthening of the System for the Activation of the Organization
Active appointment of young and female personnel andforeigners to executive and managerial positions
X Average age of the four new executives: approximately 43
years old

Appointment of outside director
X Appointment of one outside director to ensure decision-

Young personnel with strong motivation were appointed as
executives from the viewpoint of further strengthening the promotionof the business.

making and supervision of business execution from abroader perspective
Newly appointed outside director

X Appointment of two female officers
Strengthened the promotion of the services and businesses from theviewpoint of women through the active appointment of female
officers.

X Diversity

Mr. Keita Moriwaki:
Appointed from the perspective that he will utilize the abundant
experience and expertise he has accumulated as an attorneyspecializing in commercial law and his strong awareness ofcomplianceAppointment of a foreigner as the senior manager of the Instructor
Education Department- Towards a Company Expanding Job Opportunities for Women Ratio of female officers

27.8%

Ratio of female personnel
in managerial positions

69.1%*Managerial positions: assistant manager and*higher-ranked positions as of June 30, 2013

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

Certification of the next generation accreditation mark
"KURUMINN"
Certified by the Tokyo Labor Bureau, the Ministry ofHealth, Labour and Welfare for the achievement ofthe general owner action plan prepared under theAct on Advancement of Measures to Support
Raising Next-Generation Children on June 20, 2013.

FY2014 1Q Results Briefing 15

Earnings Forecasts

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FY2014 1Q Results Briefing 16

FY2014 Earnings Forecasts(Unit: million y en)

FY2014
1Q (Result)

1H (Forecast)

FY2014 (Forecast)

Net sales

68,161

137,400

277,600

Operating income

1,727

3,600

9,000

2.5%

2.6%

3.2%

1,367

3,200

8,000

2.0%

2.3%

2.9%

1,047

2,100

4,500

1.5%

1.5%

1.6%%

Ordinary income%Net income%* Forecasts for the first half of the fiscal year ending March 31, 2014 are the revised forecasts announced on May 24, 2013.

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing 17

FY2014 Earnings Forecasts by Business(Unit: million y en)

Net sales

FY2014
1Q (Result)

1H (Forecast)

FY2014 (Forecast)

Medical Support

26,31452,300104,900

Long-term Care

35,461

71,200143,500

Health Care

827

2,400

5,500

Long-term Care
+ Health Care

36,28873,600149,000

5,466

11,20023,300382

800

1,600(291)(500)(1,200)68,161

137,400277,600

Education
Other
Eliminations/
CorporateTotal(Unit: million y en)

Operatingincome

FY2014
1Q (Result)

1H (Forecast)

FY2014 (Forecast)

Medical Support

1,855

4,100

8,500

Long-term Care

3,149

5,350

11,300

Health Care

750200Long-term Care
+ Health Care

3,157

5,400

11,500

Education(1,169)(1,900)(3,300)Other
Eliminations/
Corporate(9)0100(2,107)(4,000)(7,800)

Total

1,727

3,600

9,000

Copyright © 2013 Nichii Gakkan Company. All rights reserved.

FY2014 1Q Results Briefing 18

All performance targets and other forecasts, including numbers ofcontracts and users, and goals, contained in this document arebased on information currently available to the Nichii Gakkan
Group and will be affected by uncertain factors, including
economic circumstances, the relaxation of regulations, andemployment conditions. Please note that actual results, numbersof contracts and users, and other data may be different from theforecasts.

Contact information
Nichii Gakkan Company
IR Division, Public Relations Department
Corporate Planning Headquarters
Address: 2-9 Kanda Surugadai, Chiyoda-ku, Tokyo
Tel: 03-3291-5637 (IR Division)
E-mail: nichii-ir@nichiigakkan.co.jp