www.nichiigakkan.co.jp

NICHIIGAKKAN CO., LTD.

Financial Results Briefing Document
for the First Nine Months of the Fiscal YearEnding March 31, 2017

February 9, 2017

Financial Results Highlights（Unit: m illion yen）

FY2016.3 3Q
AmountNet Sales
Operating Incom e%

Ordinary Incom e%Profit attributable toowners of parent%

FY2017.3 3Ｑ
AmountChange205,290

207,294

1.0%

▲ 112

2,097-

▲0.1%

1.0%

▲ 1,960

108

▲1.0%

0.1%

▲ 2,844

▲ 122

▲1.4％

▲0.1％

-© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

2Highlights of Financial Results for the First Nine Months

Benefits of Area Management Appear
New record sales (¥207,294 million, up ¥2,003 million from the previous year)• Significant increase in sales in the child care business• Sales in the facility care-based long-term care businessand strategic investment businesses increased (with thecontribution of the child care and China businesses)

Ordinary income was positive again after two years(108 million yen, up 2,068 million year on year)• Operating income increased as a result of the profit-focused strategy(2,097 million yen, up 2,210 million yen year on year)→ The long-term care segment led the improvement in profitability(significant increase in operating income of Nichii Carepalace,operating income up 93.7%)→ Reduced SG&A expenses (36,441 million yen, down
779 million yen year on year)

Sales growth in the child caresegment (year on year)

up

74.8%
Increased profit in thelong-term care segment(year on year)

2,861
million yen© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

3

Development of Area Management System for SteadyImplementation of Strategy[Overview of Reorganization] dated January 16, 2017
■Shift to a four-branch structure• Integration of the functions of Tokyo and West Japan
Branch (Kinki) into a division of the Head Office• Establishment of Chugoku-Shikoku
BranchArea directly controlled by the HeadOffice
Area directly controlled by
Chugoku-Shikoku Branch
Area directly controlled
by East Japan Branch■Objectives of changing
the branch structure
Integration of branchfunctions into the Head Office• Centralization of human resources• Improvement of strategy implementation
process

Area directly controlled byChubu Branch
Area directly controlled
by Kyushu Branch

Development of area
management reform model• Verification ofimplementation process

Application to allareas• Sharing implementation
process

Improve practicalskills of entireorganization© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 4

Improvement of Organizational Management Function through Expansion ofExecutive Officer System
The Executive Officer System has been expanded since April 2016 to improve the functions of operating
the business.

The operation systems of the branches and business sites are strengthened under the focused business
operation system to which executive officers are assigned throughout Japan.
Total 28（Managing officer 4 + Operating officer 24）
Head Office＜Managing officer＞
Kiyomi Hoshino
Takako Tanemoto
Makoto Nakamura Tomoya Kusakabe＜Executive officer＞
Minako Nagashima Yoshie Miyai
Satoshi Tsurumaru Megumi Suzuki
Kazuya Kodama
Satoshi Tsujiuchi
Sanae Itagaki
Youta Kitayama
Shinichi Suzuki
Michiko Endou
Shinya Hukuda
Kayoko Kihara

East Japan
BranchChubu Branch

ChugokuShikoku Branch＜ Executive officer ＞
Fujiko Saitou
Sachiko Kudou
Masako Nikaidou＜ Executive officer ＞
Syuuji Hayami
Saegusa Chizuko
Satomi Kashiwa＜ Executive officer ＞Masato Watanabe
Ryuuhei Kawakami

KyushuBranch＜ Executive officer ＞
Akemi Nishi
Kazuhiko Yamanaka
Keisuke Kawauchi
Norio Ikeda© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 5

Consolidated Net Sales and Operating Income by Segment(Unit:million yen)

N et Sales

FY2016.3 3Q

FY2017.3 3Q

Change(Unit:million yen)O p e r a t in g I n c o me

FY2016.3 3Q

FY2017.3 3Q

ChangeMedical Support

81,57981,131▲0.5%

Medical Support

5,804

5,579

▲3.9%

Long-term Care

107,798

108,393

0.6%

Long-term Care4,902

7,76358.4%

Health Care

3,234

3,017

▲6.7%

Health Care

457523

14.6%

Education

9,519

9,415

▲1.1%

Education▲3,803▲3,571-Child Care

2,330

4,073

74.8%

Child Care

▲631▲643-

China

1,152

1,405

21.9%

China

▲769

▲1,089-Others714624▲12.6%

Others

195

195

▲0.3％

▲ 1,039▲766－▲6,267▲ 6,660-

205,290

207,294

1.0%

▲112

2,097-

Elim ination

Total

Elimination

Total© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

6Year on year Increase insales ofMajor Changes in Net Sales
・Hospitals ＋0.35 billion yen
・Clinics－0.5 billion yen
・Medical Education－0.3 billion yen

2,003million yen
・Home Care －1.75 billion yen
・Facility Care ＋2.35 billion yen
・Care Education±0 billion yen＋1,742＋252＋272

207,294

Elimination

‘17.3
3Q

▲89（Unit: million yen）

+595

205,290▲217▲448‘16.3
3Q

MedicalSupport

Long-termCare

HealthCare▲104

Education

ChildCareChinaOther© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

7

Major Changes in Operating Income＋232＋2,860＋66▲11▲3202,097▲0▲393・Home Care+1.55 billion yen
・Facility Care＋1.1 billion yen
・Care Education + 0.25billion yen（Unit: million yen）

Year on year Increase insales of2,210million yen

▲112
▲224

‘16.3
3Q

MedicalSupport

Long-term
Care

HealthCareEducation

Child
CareChina

OtherElimination‘17.33Q© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

8Ordinary income and Profit attributable to owners of parent（Unit：million yen）
・Interest expenses 3,021million yen
・Rent expenses
27million yen
・Other121million yen

1,1802,097[FY17.3 3Q]
Ordinary
Income 108million yen
前期比4,907百万円減益
Profit attributable to owners of parent▲122million yen▲3,1691088▲2988▲330119▲122・Interest income
109 million yen
・Rent income
142 million yen
・Subsidy income
156 million yen
・Foreign exchange gains 348 million yen
・Share of profit of entities 41 million yen
44accounted for using equity
44method・Other381million yen

OperatingincomeNonoperating
incomeNonoperating
expenses

Ordinary
incomeExtraordinary
incomeExtra ordinary
lossesIncomebeforeincometaxes

Total Profit attributablenon-controllingincomeinterests
taxes

to Profit attributable toowners of parent© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

9Summary of the balance sheet（Unit：million yen）
End of March 2016

End of Dec 2016

Difference

End of Dec
2015

Current assets

63,181

61,471 ▲1,709

63,785

Fixed assets

120,988

125,230

4,241

127,854

184,170

186,702

2,532

191,640

Current liabilities

68,171

68,436

265

63,835

Non-current liabilities

77,89682,311

4,414

75,874

Total liabilities

146,068

150,748

4,679

139,709

Total net assets

38,10135,954 ▲2,147

51,931Total liabilities andnet assets

184,170

186,702

191,640

Total assets

2,532© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 10

Free cash low transition
Significant improvement in free cash flow due tocompletion of current round of
profit growth and investment（Unit: million yen）
10,000
8,000

8,836
7,448

6,000

5,490

4,000

2,984

4,441

2,000

896

0

ｰ1,958-2,000-4,000

ｰ3,545

Free cash flow
Cash flows fromOperating activities
Cash flows from
Investing activities

ｰ5,851-6,000-8,000

FY2015.3 3Q

FY2016.3 3Q

FY2017.3 3Q© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 11

Long-term Care Business: Further Progress in Profit Growth
Increased profit in all services contributed to growth
All services achieved year-on-year growth and shifted to surplus
in 3Q (October to December)（Unit: million yen） Increased quarterly profit in Long-term Care services (yoy)Focused measures• Rationalization of operation shifts• Improved treatment by caregivers ofpatients with medium to severe conditions• Stronger alliances with other services• Increased capacity utilization of facilities,etc.

1,500

9841,000

Home visit
nursing
Smallscale,multifunction
Pay nursing home479

Group Home＊500

Care planning

0Day-care

246

Home visit bathing
Rental for welfare
equipment-55-500

Welfare services forthe handicapped-1,000-1,500Home visit care

-1,193*group homefor elder adults with dementia-1,136-1,403-2,000

1Q

2Q

3Q

FY2016.3

4Q

1Q

2Q

3Q

FY2017.3© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 12

Child Care Business: Accelerated Growth through Active
Development of Childcare Facilities
Significant increase in sales as a result of active facility developmentQuarterly operating margin began to increase due to sales growth

Focused measures

Quarterly Net sales and Operating Incomeof Child Care Business（Unit: million yen）
1,600

•Enhanced promotion targeting local

1,400

governments, etc. to acquire customers

1,200• Increased capacity utilization through active

1,000

event operation

800• Appropriate cost management at business sites

600• Promotion of establishment of company-400

operated day care centers

200• Introduction of COCO Juku Jr. lessons in 72

locations (as of December 31)

01,513

Sales
系列11,404

系列2OP Margin
1,103712774

1,156844-20.3%

0%
0％
-5%

-9.6%
-16.7%

-10%
-15%
-20%
-25%

-22.8% -22.7%-30%-25.7%-35%-36.7%
1Q

3Q
2Q
FY2016.3

4Q

1Q

2Q
3Q
FY2017.3-40%© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 13

Language Business:
Strategy to Increase Sales and Cost Structure Reform

Achievement of both the improvement of basis ofCOCO Juku’s growth and cost control Aim to acceleratesales growth and deficit reduction in and after 4Q
Focused measures• Improve recruitment of foreign instructors→ 330 instructors (up 159 year on year)

顧客満足度向上（Unit: million yen）

Quarterly Operating loss of COCO Juku

0-500

• Promotion of the dominant development of juniorclasses using the main school, certification courses,and franchises→ 465 franchise schools (up 81 year on year)• Promotion reform (strengthen direct dialogues)→Open house classes across Japan (Oct., Dec., andJan.)• Development of original educational materials for-1,000-1,500-2,000-1,322-1,283-1,870-1,653-1,843-1,757-1,727-1,719-1,378-1,582-2,071

2Q

3Q

FY2016.34Q-1,490-1,513Operating loss
Movingaverage(12months)-2,500

1Q-1,189

1Q

2Q

3Q

FY2017.3

junior students, etc.
© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 14

【 Global 】China Business Consolidation progress
Name of Company / school

school1

広州市正祥和家政服務有限公司

2

北京三傑聖一人力資源有限公司

3

瀋陽日医助尓家庭服務有限公司

4

済南仁徳家庭服務有限公司

5

常州金蓓蕾健康諮詢服務有限公司

6

深圳市中家家庭服務有限公司

7

深圳市中家華傭家政服務有限公司

8

深圳市中家星級家政服務有限公司

9

深圳市中家職業技能培訓学校

10

杭州天使家政服務有限公司

11

大連九鼎互聯科技発展有限公司

12

武漢尓邦家政有限公司

13

広西康之橋護理服務有限公司

14

南寧康之橋職業培訓学校●15

欽州康之橋職業培訓学校●

16

安徽賽菲家庭服務管理有限公司

17

合肥賽菲職業培訓学校●

18

柳州市康之橋職業培訓学校●

19

日医（珠海）健康服務有限公司

20

日医（仏山）健康服務有限公司

21

西安海鑫家政清潔工程有限公司

22

梅州市客家大嫂家政服務有限公司

23

梅州市華傭職業培訓学校

ＰＬＢＳ（Unit：millions or Yen）

FY2017.3 3Q（Jan.～Sept.）
Net Sales●15 companies
and 5 school
corporation wereconsolidated.

17 companies
and 6 school
corporation wereconsolidated

1,405

Operating Income▲1,089Amortization of goodwill

266※Includes wholly-owned subsidiaries of the Nichii Group（Unit：millions or Yen）

End of Sept.
Of 2016
Total Assets

3Q＋2companies
1school※4Q（expected）●

3Q＋1companies
1school

5,851

Net assets

2,281

Amortization of goodwill

1,298© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 15

List of Cities Where Nichii’s China
Business is Established

Display Color* Includes non-consolidated subsidiaries

Advanced
into 24cities● Changchun●

Beijing
●
●

Jinan

●

Hefei
●

Wuhan ●●

DalianChangzhou●●

ShanghaiHangzhou●Liuzhou●●●Qinzhou

Beijing/Tianijin/Chengdu

瀋陽日医助尓

Shenyang/Changchun

済南仁徳

Jinan/Qingdao

Weihai/Yantai/Weifang

大連九鼎互聯DalianHarbin

常州金蓓蕾Changzhou

Suzhou/Nanjing/Wuxi/Nantong/Yangzhou/Xuzhou

杭州天使Hangzhou

Ningbo/Shaoxing/Huzhou

武漢尓邦

Wuhan

Jingzhou/Huangshi/Ezhou

安徽賽菲Hefe

西安海鑫

Xi’an

深圳市中家

Shenzhen/Huizhou/Meizhou Jiangmen

広州市正祥和Guangzhou

広西康之橋

Nanning/Liuzhou/Qinzhou

Guilin

日医広州

Zuhai/Foshan

Zhongshan

中福日医Shanghai

Xiamen/Fuzhou/Zhengzhou/Changsha

QingdaoChengduNanning● ●●●●PlansLangfang/Taiyuan/Chongqing/Kunming

北京三傑聖一Tianjin●●AlreadyShenyang●Xi’anName of city

Name of Comnany●Meizhou
Huizhou
ShenzhenZhuhai
Foshan Guangzhou© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 16

Earnings forecast（Unit：million yen）

FY2017.33Q（Result）

Full-year（Revised forecast）

207,294

282,000

2,097

4,800%

1.0%

1.7%

Ordinary Income

108

1,300%

0.1%0.5%▲ 122500▲0.1%0.2%

Net Sales
Operating Income

Net Income%© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

17

Earning forecast (by Segment)（Unit：million yen）
Net Sales
Medical Support
Long-term Care
Health Care
Education
Child CareChinaOthers
Elimination
Amount

FY2017.33Q（Result）

81,131
108,393
3,017
9,415
4,073
1,405624▲ 766
207,294

Full-year（Revised forecast）

108,200
144,400
4,900
15,600
5,100
4,000
1,000
▲ 1,200
282,000（Unit：million yen）
Operating Income

Medical Support
Long-term Care
Health Care
Education
Child Care
China
OthersElimination
Amount

FY2017.33Q（Result）

5,579
7,763523▲ 3,571▲ 643▲ 1,089195▲ 6,660
2,097

Full-year（Revised forecast）

7,600
9,700
800
▲ 4,000▲ 500▲ 900300▲ 8,2004,800© 2017 NICHIIGAKKAN CO., LTD. All rights reserved.

18

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

Contact information
NICHIIGAKKAN Co ., LTD.
PR Division, Public Relations Department
Corporate Governance Headquarters
Address: 2-9 Kanda Surugadai, Chiyoda-ku, Tokyo
Tel: 03-3291-3954 (PR Division)
E-mail: nichii-ir@nichiigakkan.co.jp© 2017 NICHIIGAKKAN CO., LTD. All rights reserved. 19