www.nichiigakkan.co.jp

NICHIIGAKKAN CO., LTD.

Financial Results Briefing Document
for the First Nine Months of the Fiscal YearEnding March 31, 2018

February 9, 2018

Financial Results Highlights（Unit : million yen）

FY2017.3
Net Sales
Operating Income

3Q

207,294

212,914 +5,619

300,000

2,097

5,963 +3,866

9,300

1.0%

Ordinary Income

108%

0.1%

owners of parent%

Full-year

3Q%

Profit attributable toFY2018.3▲ 122▲ 0.1%

Difference

2.8%（ forecast）+1.8pt3.1%

3,014 +2,906

6,000

1.4%

+1.3pt2.0%1,704 +1,827

3,000

0.8%

+0.9pt1.0%© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

1Major Changes in Net SalesYear on year Increase in Salesof 5,619 million yen
Core businesses ＋4,852＋2,259（Unit : million yen）
Strategic businesses＋114＋208

Globalization businesses＋324+372＋459+372＋2

212,914▲388＋3,187

・ Home Care
▲237million yen
・ Facility Care +3,711million yen
・ Care Education ▲287million yen

207,294▲594・ Hospitals▲64million yen
・ Clinics▲305million yen
・ Medical Education ▲225million yen

FY2017.33Ｑ

MedicalSupport

Long-termCareChildCare

HealthCare

Education

Therapy

ChinaOthers

Elimination

FY2018.33Ｑ© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

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Major Changes in Operating Income
Year on year Increase in Operating
Income of 3,866million yen（Unit : million yen）
Core businesses ＋3,921

Strategic businesses ＋68＋3,122＋591▲1402,097

3Ｑ▲45▲112Others

Elimination

・ Home Care+1,114million yen
・ Facility Care+2,138million yen
・ Care Education ▲130million yen＋939

MedicalSupport5,96336▲207▲316

FY2017.3

Globalization businesses＋36Long-term
CareChildCare

HealthCare

Education

Therapy

China

FY2018.3
3Ｑ© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

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Consolidated Net Sales by Segment（Unit:million yen）

Net Sales

FY2017.3

FY2018.3

Change

3Q

3Q

(%）

FY2018.3
Fyll-year（forecast）

81,13180,537▲ 0.7%

112,300

108,816

112,003

2.9%

154,100

Child Care

4,073

6,332

55.5%

9,300

Health Care

2,268

2,382

5.0%

4,600

Education

9,415

9,623

2.2%

15,000

326

328

0.5%

1,600

China

1,405

1,777

26.4%

3,100

Others624

1,08373.5%

1,600▲ 766▲1,154-▲ 1,600

207,294

212,9142.7%

300,000

Medical Support

Long-term Care

Therapy ※Elim inationTotal※New segment display from the fiscal year ended March 31, 2018
© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

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Consolidated Operating Income by Segment（Unit:million yen）

Operating

FY2017.3

FY2018.3

Changeincome

3Q

3Q

(%）

FY2018.3
Fyll-year（forecast）

Medical Support

5,579

6,518

16.8%

9,200

Long-term Care

7,866

10,98839.7%

12,800Child Care

▲ 643

▲ 783-▲ 600

133 ▲ 70.2%

600

Health Care449▲ 3,571▲ 2,980-▲ 2,900▲ 29▲ 236-0China▲ 1,089▲ 1,053-▲ 1,100

Others195

150▲ 23.1%200▲ 6,660▲ 6,772-▲ 8,900

2,097

5,963

184.4%

9,300

Education
Therapy ※Elim ination

Total※New segment display from the fiscal year ended March 31, 2018
© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

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Summary of the balance sheet（Unit : million yen）
End of March 2017

End of December 2017 Difference

End of December 2016

Current assets

64,723

66,117

1,394

61,471

Fixed assets

126,984

122,964 ▲4,020

125,230

191,708

189,082 ▲2,626

186,702

Current liabilities

68,53060,215 ▲8,314

68,436

Non-current liabilities

85,25290,784

5,531

82,311

Total liabilities

153,783

151,000 ▲2,783

150,748

Total net assets

37,92438,081

157

35,954

191,708

189,082 ▲2,626

186,702

Total assets

Total liabilities and netassets© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

6

Changes in Cash flow
(Unit : million yen）

ＦＹ2017.3

FY2018.3

3Q

3Q

Difference

Cash flows from Operating activities

7,448

11,441+3,993Cash flows from Investing activities▲ 1,958▲ 166+1,792

5,490

11,275+5,785

Cash flows from Financial activities▲ 6,928▲ 10,586▲ 3,657

Cash and cash equivalents at end of year

13,003

16,958+3,954

Free cash flow

© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

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Segment Overview© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

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Core Business Overview
Aiming to catch up to the plan through site-led business reform
Net Sales
Medical SupportBusiness

81,131

5,579

FY.2017.3 3Q

Operating Income (Unit million yen)
80,537
6,518FY.2018.3 3Q

Long-term
Care Business

108,816

112,003

7,866

10,988FY2017.3 3Q

FY2018.3 3Q

6,332

ChildcareBusiness

4,073

▲643

▲783

FY2017.3 3Q

FY2018.3 3Q- Decreased sales due to decreased number of contracted
medical institutions*Priority this fiscal year is to strengthen the humanresource base
- Increased profit due to contract optimization

Sales growth rate per hospital(year-over-year)+5.1％- Increased sales and profits due to increased utilization rate ofSales growth rate for residenceresidence-type facilities
type service (year-over-year)- Decreased sales of at-home type services due to decreased
number of users requiring carers*Transition period of business model establishment conformingwith institutional trends+8.9％- Increased sales due to active expansion of corporate-run childcare
Number of childcare facilities
centers(year-over-year)- Loss trending down on quarter-by-quarter basis due to increased
utilization rate resulting from reinforced corporate and regional
business- Establishment of 49 new facilities fixed for the following fiscal year

Increased by81 facilities© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

9Strategic Business Overview
Putting effort into establishing a service structure with the aim of enhancing
profitability in the following fiscal year
Net Sales

Health Care
Business

2,268449

FY.2017.3 3Q

Education
Business

9,415▲3,571

Operating Income (Unit million yen)
2,382133
FY.2018.3 3Q

9,623▲2,980

TherapyBusiness

FY2017.3 3Q

FY2018.3 3Q

326328▲29▲236

FY2017.3 3Q

FY2018.3 3Q- Increased sales due to enhanced promotional activities ofhousekeeping services and private brand products- Decreased profit due to up-front expenditure for launch of theSunny Maid Service housekeeping service provided by foreign
staff (scheduled to start on February 19)- Increased sales due to increased unit price per COCOJUKU
student- Increased profit due to more efficient advertising- Refurbishment and re-opening of COCOJUKU (for adults) as
Gaba, stronger expansion of COCOJUKU Jr. satellites- Increased sales due to newly established A-LOVE dog
grooming salon- Decreased profit due to up-front expenditure- Expansion of dog grooming salons
Number of stores is planned to reach 22 by March 31

Number of Nichii Life users(year-over-year)+9.4％
Number of satellites

23 facilities
Number of A-LOVE stores(as of December 31)

13 facilities© 2018 NICHIIGAKKAN CO., LTD. All rights reserved. 10

Promoting Structural Reform of the Language Business(System Integration and Parallel Brands)
Promoting the establishment of a business structure suitable for fullscale operations from April
January 2018

February and March

April onwards

Number of Gaba Learning Studios
by area (April 1 onwards)
Hokkaido & Tohoku
8 Gaba・Jr. learningstudiosRefurbish and re-open COCOJUKU as Gaba
March 31, 2018

February 201825 learning studios in Tokyo,
Nagoya and Osaka

80 learning studios atcompletion ofrefurbishment of all studios

January to March 2018
Explain to and transition existing students and contracted corporations

From January 2018
Train teachers and counselors as needed
Promote the expansion of
COCOJUKU Jr. satellites

Target for March 31, 2018
At least 100 facilities

Chubu & Hokuriku

Kyushu & Okinawa
8 Gaba・Jr. learning
studios
1 Gaba learning
studioChugoku &Shikoku
9 Gaba・Jr.
learning studios

8 Gaba・Jr. learningstudios
3 Gaba learning
studios

Kanto &Koshin'etsu
32 Gaba・Jr.
learning studios
41 Gaba learningstudios
Kansai8 Gaba・Jr. learning studios
6 Gaba learning studios© 2018 NICHIIGAKKAN CO., LTD. All rights reserved. 11

Effectiveness of Profit Improvement through Nationwide Gaba Expansion
Striving to increase sales and curb costs through efficient expansion
making use of the COCOJUKU infrastructureStoreopenings- Curb store opening costs
Curb investigation costs (competition investigation, market
research and property surveys) and initial advertising costs- Curb running costs through parallel brands (increase the learning
studio utilization rate)

Teachers

Salespromotion- Use Gaba and COCOJUKU teachers effectively- Cultivate corporations through Gaba-Nichii collaboration- Encourage cross-promotional sales between Gaba and COCOJUKU- Accelerate growth of student numbers using the Gaba system for
attracting customers- Increase advertising efficiency© 2018 NICHIIGAKKAN CO., LTD. All rights reserved. 12

Globalization Business Overview
Putting effort into opening new dementia-specialized facilities and into activitiesfor raising awareness of and popularizing Japanese-type nursing
Net Sales

Operating Income (Unit million yen)
1,777

China

1,405

▲1,089▲1,053

FY.2017.3 3Q

FY.2018.3 3Q- Increased sales due to consolidation of 2 regional operatingcompanies and 1 educational corporation in China- Decreased loss due to commissioned projects from local
governments etc.
- Start of expansion of dementia-specialized facilities (Beijing)
Proactively allow private viewings etc. to raise awareness

Number of consolidated Chinese
regional operating companies

21 companies,
8 educational
corporations(Unit: million yen)

Future expansion of dementia-specialized facilities

September 30,
2017●Nichii Hangji (Beijing) Health Management Technology Co., Ltd.
- Implementing preparations for opening a second store●Shenyang Nichii Zhuer Family Services Co., Ltd.
- Implementing preparations to open in July 2018

●Trinity Human Resource Co., Ltd, Tianjin- Implementing preparations to open in July 2018

Total Assets

7,251

Net Assets

6,237

Goodwill

1,167© 2018 NICHIIGAKKAN CO., LTD. All rights reserved. 13

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 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.

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