Riso Kyoiku Co., Ltd.
Q1 Financial Results Briefing for the Fiscal Year Ending February 2023
July 14, 2022

Event Summary[Company Name]

Riso Kyoiku Co., Ltd.

[Company ID]

4714-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q1 Financial Results Briefing for the Fiscal Year Ending February 2023

[Fiscal Period]

FY2022 Q1[Date]

July 14, 2022

[Number of Pages]

19[Time]

15:30 – 15:53(Total: 23 minutes, Presentation: 17 minutes, Q&A: 6 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

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2Masahiko Tenbo
Masaaki Kume

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President
Vice President and CFO

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Presentation
Tenbo: Hello everyone, my name is Tenbo from Riso Kyoiku Co., Ltd. I am happy to speak to you today.
Kume: I am Kume from Riso Kyoiku. I am happy to speak to you today.
Tenbo: The time has come to start, and we will now begin the presentation of the financial results for Q1 of
the fiscal year ending February 28, 2023.
Once again, as part of our measures to prevent the transmission of Coronavirus, we have decided to hold ourfinancial results presentation online. We apologize for any inconvenience this may cause you and ask for yourunderstanding.
Kume: As usual, we will explain our Q1 results for the fiscal year ending February 28, 2023, the background of
the results and forecasts, our medium-term management plan, shareholder return policy, and future outlook,based on the presentation materials, and then we will answer the questions that you send us via the Q&A
function. Please feel free to send us your questions even during the presentation.
First, President Tenbo will explain the results for Q1 of the current fiscal year ending February 28, 2023.
President Tenbo, please begin.

Tenbo: I will now explain the results for Q1 of the fiscal year ending February 28, 2023.

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Net sales increased JPY331 million from the previous term to JPY6,443 million. Operating income was minus
JPY348 million, down JPY145 million from the previous period. Ordinary income was minus JPY329 million,
down JPY168 million from the previous period. Net income decreased JPY95 million from the previous year tominus JPY262 million.

The following is the background of the results and the outlook. The number of students remained steady with
the Group totaling 24,847, up 3.1% from the same month last year. In Q1 of the current fiscal year, sales
increased by 5.4% as a result.
In addition, Riso Kyoiku Group companies have been opening new schools and renewing existing schools, andin addition to upfront investments such as capital expenditure, personnel expenses for recruiting excellent
personnel, recruitment and advertising expenses, and the recording of expenses for workplace vaccination,etc., resulted in a decrease in profits.
The Group's performance is subject to seasonal fluctuation factors, which bottom out in Q1, the start of the
new school year, and swell significantly in Q2 and thereafter, when summer seminars and other events are
held, so there will be no impact on the full-year forecast.

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By segment, in the TOMAS tutoring school business, new TOMAS Futamatagawa, Hamadayama, andOyamadai schools opened in March 2022. Also in March 2022, TOMAS Kawaguchi and in May 2022 TOMAS
Mitaka schools were renewed. We also opened a new English conversation school, Inter TOMAS Mitaka.
As of May 31, 2022, there were 96 private tuition schools and 12 English conversation schools. As for the
future, we plan to renew TOMAS Musashi Kosugi School in August and TOMAS Tachikawa School in September.

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Continuing on, Meimonkai, a home dispatch tutor business unit, renewed Meimonkai Sannomiya Ekimae
School in April 2022. The new MEDIC Meimonkai brand opened its Osaka headquarters school in March and
its Kobe school in April, bringing the total to 35 Meimonkai schools, 12 TOMEIKAI schools, and two MEDIC
Meimonkai schools as of the end of May 2022.

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Next is Shingakai, a childcare and education business unit. In April 2022, Konami Sports Shinga's Academy
Shinagawa School, a new brand developed by Shingakai and Konami Sports Co., Ltd., opened. This school has
been very well received and was filled to capacity immediately after its opening. As for the future, we areplanning to open the Harumi Triton School for Shinga's Club Gakudo (after school care) in August as well as
Shinga's Club Childcare.

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Next is School TOMAS, an in-school individual tutoring business unit. As a result of the development of newservices such as online tutoring and AI tutoring materials, in addition to the existing services such as complete
one-on-one tutoring in schools and a self-study system that allows students to ask questions at any time,inquiries from private junior high schools and high schools across the country have increased. As of the endof May 2022, the number of schools that have signed contracts to introduce the service was 107, of which 74
are in operation.
School TOMAS has been highly evaluated not only for its ability to support schools in achieving higher
education results, but also as a means of solving the problem of teachers working long hours. We expect tosee a further increase in inquiries. In addition, we also expect to see an increase in revenue as the schools that
already introduced the system have begun to introduce the service to add different grades year by year.

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Next is the Three-Year Medium-Term Management Plan, announced in January of this year, starting with thecurrent fiscal year ending February 2023. For the fiscal year ending February 2023, the Company forecasts net
sales of JPY33 billion, ordinary income of JPY3.7 billion, and net income JPY2.5 billion. For the fiscal year ending
February 2024, the Company plans net sales of JPY37 billion, ordinary income of JPY4 billion, and net incomeof JPY2.7 billion. For the fiscal year ending February 2025, we plan net sales of JPY40 billion, ordinary incomeof JPY4.5 billion, and net income of JPY3 billion.
We will continue to strive for sustainable growth and management efficiency by providing a safe learning
environment and authentic educational services.
Mr. Kume, Vice President, will continue to explain the dividend for the fiscal year ending February 28, 2023.
Vice President Kume, please.

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Kume: We view shareholder returns as one of our top management priorities. This has not changed at all asa policy.
As already announced, for the current fiscal year ending February 28, 2023, we plan to pay a dividend of JPY16
per share based on the dividend for the previous fiscal year ended February 28, 2022. This has not changedat all. We will continue our efforts to strengthen returns to shareholders and enhance our corporate value.
We look forward to your continued support.

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Tenbo: Next, I would like to explain our future prospects for business alliances with other industries.
First, I would like to explain the strengthening of our capital and business alliance with Hulic Co., Ltd. We have
had a capital and business alliance with Hulic since 2020, and through a third-party allocation of shares in
November 2021, Hulic's shareholding ratio in our company increased to 20.66%, making the Company ourlargest shareholder. The partnership has been further strengthened, and Hulic is now able to introduce us toproperties in prime station-front locations in major central Tokyo areas, which it owns in abundance, on apreferential basis. We expect that this will enable us to open more classrooms in more advantageous locations
than our competitors and help us grow and expand.

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Continuing on, the business alliance between Shingakai and Konami Sports Co., Ltd.
Under this alliance, a new brand, Konami Sports Shinga's Academy, will be developed. This is a new one-stopbrand for school-age children that fulfills the wishes of parents who want to provide both study and sports
programs to their children. As I mentioned earlier, the Shinagawa School opened on April 1 as our first schoolbuilding at the Konami Main Gym, and the capacity was filled immediately and has been very favorably
received. The Konami Main Gym has a large number of child members, and we expect that expanding Konami
Sports Shinga's Academy at Konami Sports sites will contribute to an increase in the number of pupils andsales.

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In addition to the partnerships with Hulic and Konami Sports, the three companies have formed a businessalliance to develop Kodomo Depart, a building complex specialized in education. Kodomo Depart, utilizing a
medium size building that Hulic will develop or renovate from existing properties, is a place where various
child-rearing and educational functions for children will be concentrated, where children's diverse intellectual
curiosity will be nurtured, and where learning and experiences will be accumulated.
At Kodomo Depart, we plan to develop each of our brands, such as Shinga's Club daycare for children as young
as one year old, and Shinga's Club for after school to cater for children in the lower grades of elementary
school. From then onward, we hope those pupils will go on to TOMAS, a one-on-one private tutoring schoolfor higher education, and Inter TOMAS, a one-on-one English conversation school.
In addition, by housing various children's service providers as tenants in the same building, such as Konami
Sports' children's gym, children's clinics, and cafés, it will reduce the burden on parents by allowing them tocomplete their children's needs in a single location, thereby making it easier for children to attend our facilities.
We expect that this will facilitate the smooth implementation of our strategy to attract and retain children.

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As announced in April of this year, Hulic has been selected as the project proponent for the Urban Renewal
Step-Up Project to be implemented by Shibuya Ward, and Kodomo Depart will also be located within the
MITAKE Link Park (tentative name), a building to be developed. While the MITAKE Link Park (tentative name)is scheduled for completion in 2026, we are also moving forward with the development of Kodomo Depart bydeveloping new buildings or renovating existing ones, and we plan to increase the number of buildings to 20
in the Tokyo metropolitan area by 2029.

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In 2015, Shingakai formed a business alliance with Kids Smile Project Inc. and have jointly developed Japan's
first original educational program, called KID’S PREP PROGRAM. This has already been introduced to licensed
preschools. As announced in March, we have entered into a business alliance with four companies, including
Riso Kyoiku and Kids Smile Holdings. Both are parent companies of Shingakai. This is a comprehensive
partnership to further strengthen our relationship.
Specifically, Shingakai and Kids Smile Project will mutually dispatch executives to each other to develop
original educational programs and business schemes to be established through this business alliance tonursery schools and certified child centers nationwide. In addition, we will secure excellent human resourcesby establishing a recruiting system and a training system, aimed at securing excellent childcare providers, andstrengthen our content, brand, and ability to attract customers, laying the foundation for our future growthstrategy.
In addition, we will introduce the services of Shingakai, TOMAS, Meimonkai, and other services to theapproximately 4,000 members of the Kids Smile Project and members attending nursery schools and certified
childcare centers nationwide who wish to take entrance exams for elementary and junior high schools,
thereby further promoting the Group's strategy of retaining pupils on a nationwide scale.

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I would like to continue by explaining the business alliance between School TOMAS and KDDI Matomete Office
Corporation. The recent COVID-19 pandemic has heightened the need to improve the infrastructure for ICT
education in schools. It is also required to happen quickly.
KDDI Matomete Office will provide the hardware, such as the internet environment and tablet arrangements,
to the school, and our School TOMAS will utilize the hardware to support learning. The two companies will
form a business alliance in which they will be responsible for the development of ICT education infrastructure
for school education. School TOMAS services to schools introducing KDDI S Office services, and likewise, KDDI
Matomete Office services to schools introducing School TOMAS services. Not only referrals via mail, but wewill expand our services to new schools. We believe that this partnership will contribute to an increase in thenumber of schools introducing School TOMAS in the future.
Last but not least, the number of Coronavirus cases, which had been on the decrease, has been increasing
again since the end of June. The infection situation remains unpredictable. In addition, it has been extremely
hot, exceeding 30 degrees Celsius every day, making it a harsh time for students and instructors who arepreparing for the summer classes.
We will insist on face-to-face instruction with our own infection control measures as well as heat stroke
preventive measures. The advantages of face-to-face communication are that we can convey passion andcapture the sense what students are feeling, by seeing each other's faces, which helps tutors understandwhere students stumble and they can help overcome the weakness of the students and maintain motivation
through communication, which cannot be conveyed online. We will continue face-to-face instruction for thebright future of our children. Thank you for your attention.
Kume: Thank you very much.

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Question & Answer
Kume [A]: We will now move on to the question-and-answer session. Please send us your questions throughthe Q&A function at the bottom of the screen. We look forward to your questions. Do you have any questions?
May I take a few minutes to talk about IR? The position of the stock price right now is hovering around JPY300.
My personal impression is that there are various indicators on the stock price, based on the dividend, but as I
explained, there was indeed a negative range in Q1 of the previous year. For example, the Coronavirus
vaccination, which we didn't have last year. In addition, advertising expenses and renewal expenses werebrought forward, and these are the so-called upfront investments and expenses that were not incurred lastyear.
But for us, it's in line with the plan, just as we had planned. Another item is that the dividend of JPY16, thesame as the previous year, so from a yield standpoint, it is just under 6%, and I hope you will consider this andevaluate the various aspects of the Company.
Tenbo [Q]: We received a question. The question is: You commented on the renewal of Riso Kyoiku, capital
investment, personnel expenses for recruiting personnel, advertising, and job inoculation, but how much dideach of these increase over the previous year?
Kume [A]: The cost appropriation for the job inoculation, is rather straight forward. It was about JPY30 million.
JPY27.8 million to be exact, or about JPY30 million with consumption tax. This did not exist last year. As foradvertising expenses, they are up about 20% from the previous year, I believe. I am sorry, but I do not havethe exact numbers. If you could contact me directly, I will be able to answer you later. We apologize that we
do not have them with us at this time.
Also, costs of so-called utilities are going up. An increase of about 30% from last year. I think the current
situation in Ukraine is affecting the prices. As for the other costs, please directly contact the Corporate
Planning Department at the Secretariat, and they will be happy to provide you with detailed figures. Thankyou in advance.
Tenbo [Q]: We have received another question. The question is: Please explain the reasons for the decline inrevenue in the early childhood education business.
Kume [A]: The early childhood education business, Shingakai, has indeed experienced a decline in revenue.
One reason for this is that the first semester was too good, or rather, there were more so-called nen-cho, or
oldest pupils going on to primary school the following year thus these kids took the entrance examination, in
the first semester. This was due in large part to the fact that the nen-cho kids were out of the program andthe remaining number of nen-chu (middle age pupils) was fewer after the entrance exam was over. As a result,
we are currently experiencing a decrease in revenue, but since the summer, we have seen an increase inrevenue, and we are now getting a good sense of this. That is all I have to say.
Here, this is an additional answer to the earlier question. Advertising expenses increased by JPY52 million
from the previous year and from the previous fiscal year. Also, personnel expenses, especially those for
lecturers, increased from the previous fiscal year, totaling approximately JPY73 million. JPY120 million for
both, and JPY30 million for vaccinations, which together are a cost increase factor of approximately JPY150
million. This is the main reason for the increase in costs over the previous period.

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Tenbo [Q]: We have received another question. Spring enrollment seems slow for the industry as a whole,
but are we seeing the effects of inflation on the education office? In the case of your company, we believethat the impact will be extremely small because your clients are from the high-income group, but what are
your thoughts on the future outlook, including the impact of COVID-19?
Kume [A]: Thank you for your question. Taken as a whole, we believe that it probably has a small impact on
the Education Office. However, as you say, in the case of our company, it is still limited, and on the contrary,
the number of members has not decreased that much, or on the contrary, it has increased somewhat.
The number of new members of Shingakai is also picking up, and in June and July, the number of new members
is on the contrary increasing. However, there is a resurgence of COVID-19, which may have some impact. We
will monitor the situation closely in July and August. That is all for us now.
Kume [M]: Well, it looks like we are almost done with the questions, so we will end the presentation now.
Thank you very much for your time today.
Tenbo [M]: Thank you very much.
[END]______________
Document Notes
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TollfreePortions of the document where the audio is unclear are marked with [Inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

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