Benesse Holdings, Inc.
FY2023 1H Consolidated Financial Results Briefing
November 10, 2023

Event Summary[Company Name]

Benesse Holdings, Inc.

[Event Language]

JPN[Event Name]FY2023 2Q Consolidated Financial Results Briefing[Date]

November 10, 2023

[Time]

16:00 – 17:00[Venue]Webcast[Number of Speakers]

2
Hitoshi Kobayashi
Shinsuke Tsuboi

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Representative Director, President and CEO
Managing Executive Officer, CFO, Executive
General Manager of Finance and Accounting

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Presentation

Kobayashi: Thank you all for taking time out of your busy schedules today to attend our Q2 financial results
briefing. Let me briefly explain what I will be discussing today.
Today I would like to report to you all on three points.
The first point is that CFO Tsuboi will give an overview of the 2Q results for the fiscal year ending March 31,
2024 and the outlook for the full year.
Secondly and thirdly, I would like to talk about the progress of the transformation business plan and the tender
offer for our company's shares, which was released earlier today. These are the three points I would like totalk about today.
Now, let me begin with an explanation from Tsuboi on the first theme.

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Tsuboi: I will now give an overview of the results for H1 of FY2023. Our earnings summary, etc. were disclosed
at 3:50 PM. Sorry for being a little late.
First of all, before the business results, I will talk about segment changes, starting from 2Q of this year.
As for this objective, we have changed our organizational structure in order to achieve the portfolio structuretransformation that we aim for in the transformation business plan. Accordingly, the disclosure segment has
also been changed.
Before the change, the segment was divided into education in Japan, Kids & Family, nursing care and childcare,and others, and within Kids & Family, there were domestic Kodomo Challenge, overseas Kodomo Challenge,
and lifestyle-related and publishing business such as Tamahiyo business, etc. However, this time, the kids &family business has been abolished, and domestic Kodomo Challenge will be included in the education in
Japan segment which includes Shinkenzemi and other domestic education products.
Then, we moved the overseas Kodomo Challenge business, mainly in China, and the lifestyle-related businessto Others.
Before the change, we had established the university and working adult business in the education in Japan
segment. We have regarded this business as an important segment for our future growth, so we haveestablished a new independent segment, the university and working adult segment.

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These are the highlights of our financial results for H1 of FY2023.
Net sales were JPY203.5 billion, up 0.8% from the previous year, operating income was JPY11.4 billion, up
7.9%, ordinary income was JPY8.5 billion, up 3.2%, and net income was JPY5.6 billion, up 3.2%.
Driven by the nursing care and childcare business, we were able to achieve the first increase in two quarters
in sales and profit in 2Q.

This is a water flow chart of sales by business segment in H1 versus the previous year.
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In the education in Japan, there was an increase in tuition income from Shinkenzemi and Kodomo Challenge
course, but the total amount decreased by JPY4 billion due to a decrease in enrollment.
On the other hand, the nursing care and childcare business posted an increase of JPY3.6 billion, due in part toa significant recovery in occupancy rates. University and working adult business also saw an increase of JPY500
million.
Others increased by JPY1.4 billion due to the increase in the China business with less impact of the lockdown
in China compared to last year. And with the increase in sales from the Naoshima project, the total amount is
JPY203.5 billion.

The next page shows the operating income by business segment, as shown in the water flow chart.
First, in the education in Japan business, the Shinkenzemi and Kodomo Challenge course business saw a JPY1.3
billion decline in profits. Profit from education for schools also declined by JPY100 million, due in part to thepoor performance of some assessments.
On the other hand, the nursing care and childcare business increased its income by JPY2.2 billion due to thesignificant effect of increased sales and profits. Net of the above, the 2Q results show a total increase of JPY0.8
billion from the last year.

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I would like to continue with a brief report on the outlook for FY2023.
Here are the full-year forecast highlights.
We conclude that there is no change from the full-year forecast for this fiscal year announced in May.
To recap, net sales increased 2.7% YoY to JPY423 billion, operating income increased 4.3% to JPY21.5 billion,
ordinary income increased 0.7% to JPY16 billion, net income increased 1.3% to JPY11.5 billion, and ROE was
7.3%. We expect no change from this full-year forecast.
This is a brief explanation from Tsuboi.

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Kobayashi: I will now explain the current status and progress of the transformation business plan.
This is the overall picture of the transformation business plan that we presented in May.
We have set forth the Group Purpose, and we will firmly implement reforms in our business portfolio andmanagement structure to achieve this goal. This will create a new Benesse through the transformation
business plan. That is what we talked about then.
In particular, within the portfolio strategy, we set out core education and core nursing care as core business
transformation. And a new area of challenge for new growth. I believe this is what we showed you before. I
would like to talk about the current progress in this area in turn.

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First is about the transformation of the core business.
Regarding core education of the core business, we explained that there will be a very big milestone in Japanese
education in 2025, Next GIGA. We also explained that we will complete the project from 2023 to 2025 andthat we will change to a new type of project after 2025 or 2026. We are now preparing for this.
I will talk later about the current status, especially on this left side, focusing on how the project is progressing
now through 2025.
At the same time, we are of course considering next-generation conversion and business model reforms after
2026. We are planning to take on a variety of new challenges, including the conversion to BYOD. We would
like to introduce this when we have such an opportunity again.

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We think we have to redesign the product value and sales approach of core education, especially Shinkenzemi,
and we are working on a sales reform for Shinkenzemi.
This summer's sales have showed how this should be done. We found it necessary to firmly strengthen the
upstream of what used to be a direct mail-centered sales and to begin communication by identifying
customers who are interested and willing to consider. In other words, we are testing the strengthening of
upstream measures in a big way this summer.
This means a shift in the selling expenses investment itself, with perception and experience as KPIs. We havealso strongly engaged in experiential marketing to help make that shift.
As a result, if you look to the right, the number of new enrollees is up 15% from a year ago and sales thissummer increased. Meanwhile, cost efficiency, or CPO, has been lowered by 13%. We have seen this approach
this summer and we now know that we may be able to increase the number of new enrollees while improving
cost efficiency.
Based on this successful results of this summer's sales, we are currently in the process of preparing for hightime, when the volume of new customers to be acquired is larger than that of this summer's sales, by creating
a sales strategy.

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9The next is about the value of the product, one of the issues to be addressed by Shinkenzemi.
We believe that the key to recovery in the Shinkenzemi business is how to improve and enhance children's
motivation to learn. I think these three things listed on the left are the issues that need to be addressed inorder to improve children's motivation to learn.
The first is advancing and deepening of learning that attracts interest and attention. To this end, we need topropose other media learning or new ways of learning.
The second is about the initiative hurdle. We need to lower the hurdles for children to engage in learning, andto make sure that their utilization is promoted.
And the third and final point is that we need to strengthen the recognition or involvement of parents in the
study. It will be necessary to create opportunities for communication between parents and children and othermechanisms. We have such themes.
To achieve these themes, we are making major product enhancements in 2023 and 2024, and we have started
some of them in the middle of this fiscal year.
The first point is developing new learning in Shinkenzemi which promotes acquisition, mastery, and retention.
The second point is to lighten children's stress in the learning process. And then making a connection. We aim
at fostering a desire to learn by making connections with other people, between parents and children, andother connections as a starting point. We are planning from the middle of this fiscal year to incorporate thesethings into our products in April of next year in a big way.

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Firstly, let me tell you about the first point, a new learning proposal that promotes acquisition, mastery, andretention.
What we have already done this year is assisting students in choosing their optimal path after graduation in
the senior high school courses in conjunction with the Shinken Simulated Exams. It's called Goukaku Gyakusan
Navi. We started doing these things. The idea is to have enrollees of the senior high school courses send
photos of the results of the Shinken Simulated Exams via smartphone, and to assist them throughindividualized review program, daily study plan, or application advice in response to the results.
In fact, the utilization rate is between 20% and 30%. Although the submission rate is inevitably low for thiskind of service in the senior high school courses, it is the highest utilization rate for a communicative service
like this among all the services offered in the senior high school courses to date. We would like to actually
make this an ongoing program.
And on the right side is what we are planning to reinforce in the elementary school courses starting next April.
Nintendo_Switch was introduced in April of this year, and we will be rolling it out to all grades. We will also
expand into the junior high school courses.
We will then attach teaching tools that foster thinking skills in April, and we will link these to the teachingmaterials so that they can be used throughout the year.
Finally, we will incorporate programming materials that develop problem-solving skills. We are preparing to
implement these new initiatives for this first theme.

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11Regarding the second point, stress reduction in the learning process.
For this one, we are trying to incorporate a system in which children can ask questions or consult with us, andwe are planning to use a generative AI to communicate with children in a form of interaction that makes him
or her want to ask questions. That is what we are planning to start in April next year.
Also, the third and final point, fostering a desire to learn by making connections as a starting point. These
three are very important.
In the April issues of the first grade of junior and senior high school courses, a smartwatch is included. This is
not only to wear a separate watch, but also to manage the daily tasks to be done in Shinkenzemi and set
alarms in this smartwatch to foster motivation in children. That is what we are trying to do.
Furthermore, we are considering a virtual study room where children can have a real connection with teachersand peers from all over the country. We want to create an atmosphere of enhancing encouragement andcourage among them through connections there. We are planning to start such a thing in April, and prepare
the virtual study room, starting next January.
So what are the results? The results are yet to be seen, but at least we have already held reservations ofcurrent enrollees to continue their membership after April with this information. We have just started. This
reservation rate drops off comparatively as the grade gets higher, but the rate of the upper grades of
elementary school, where we have had an issue up to now, is 110% to 118% compared to a year ago. We
believe that many people are placing expectations on what we are preparing now.

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The following is the status of the school business. This time, I will discuss the progress of the elementary andjunior high school projects.
The replacement of terminals distributed under the GIGA school concept in 2025 is a major event here. Then,
we have Mirai Seed tablet, a paid learning software. The number of schools which had adopted this was 9,010
in March, but the current figure for September is 9,448, a smooth increase. We hope that this number will
increase up to 12,000, using this replacement of terminals under GIGA as an opportunity point. That is thekind of challenge we intend to take on.
In fact, we have made a strategic investment of about JPY1.1 billion in this area this year, and we are now
making steady preparations to strengthen our product lineup and the follow-up system for school sites.

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We presented this table before in the transformation business plan and showed that we will boldly take on
the challenge of cost structure.
We talked about reducing costs by JPY3 billion to JPY5 billion by 2025 against the current cost pool of JPY34
billion. In this first year of the project, we have already been able to reduce costs by about JPY1 billion.

Let me tell you a few specific activities.

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The first is the integration of Benesse Infoshell, which was the group's IT subsidiary. What we wanted to do
through this is to improve the Group's DX capabilities by reallocating IT personnel and promote activities tointernalize the system.
In this area, we already expect to reduce costs by about JPY1 billion this fiscal year through internalization.
This amount grows with each passing year.
The second point on the right side is that we are also initiating a project for a next-generation contact center.
Aiming to solve customers' problems 24 hours a day with humans and AI, we have already done a press releaseon this theme alone. Our company and two related companies have joined forces to develop this new service.
The impact for the current fiscal year is not very large, about JPY0.5 billion. This is because this was decided
in the middle of the term. But preparations are well underway for the next fiscal year and the year after that,which will also enable significant cost reductions and quality improvements.

Next is the core nursing care of the core business.
As for this one, the occupancy rate was once heavily impacted by the spread of COVID-19. We are now working
to raise this level and have it make a significant contribution to the Group's performance.
As of the end of September, the rate recovered to 91%. We also expect to see the occupancy rate increase
even more strongly in October and November. As you can see on the right, we are vigorously working on sales
enhancement.
We also believe that the reclassification of COVID-19 as Class 5 has made our customers more active, and weare confident that we will be able to achieve the recovery in occupancy that we have planned.

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I would like to continue by discussing new areas.
In the transformation business plan, we had mentioned three points, which are listed now. They are university
and working adult, nursing care and overseas business.
This time, I would like to talk a little about the progress of our university and working adult business.

This is a phase in the university and working adult business.

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First, until FY2025, we will firmly expand the existing model, the business we are already doing now. At thesame time, we had planned in the transformation business plan to achieve even greater growth by developing
a new model in addition to this existing model between 2025 and 2030.

This is the current status of the existing model.
They are currently growing well. Sales have grown by 6.4% and operating income by 28.2%. Although we arestill small in scale, we will first build a solid foundation through the growth of this existing business. And thenumber of Udemy customers is steadily increasing now.
Also, as for here, while linking this university business and other businesses throughout the Group, we willlink the Group's customer base to this university and working adult business. As you can see on the right side,
webinars were held in collaboration between Shinken-AD and Benesse i-Career. Or collaboration of Benesse
senior support, such as Waris x Sankyu! and Waris x Style Care, and many other new developments haveemerged in the past six months.

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17Our strategy for the growth of universities and working adults business is to add new models to the growthof existing models, and we will continue to build on each of the four circles on the left side of this page.
Learning is growing, as Udemy has grown as mentioned earlier, and its customer base is steadily increasing.
We will also further enhance the visualization of current skills by collaborating with SkyHive or by deploying
the GPS that we have had in our company to working people. And matching. This will be done by expanding
the matching area in Waris.
We are currently working on this project from FY2030, checking the progress while back casting.

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18This is the last topic for today. I would like to talk about the tender offer for our company's shares released
today.
The Board of Directors today passed a resolution to express its opinion on the MBO. The content of theresolution is that the founding family of the Company has agreed to an MBO to be conducted jointly with the
EQT Group.
Today, EQT Group released a notice regarding the planned commencement of a tender offer for the Company.
This will be a so-called management buyout, or MBO, conducted by our founding family in collaboration with
the EQT Group. In response to this, we expressed an opinion in favor of the tender offer and recommended
that the shareholders tender their shares in the tender offer as the Company's opinion as of the same date,
which was resolved today at a meeting of the Board of Directors.
Please see below for an overview.
Main terms of the tender offer. The tender offer price is JPY2,600 per share of common stock. This is the sameamount for one American Depositary Share. The premium to the simple average closing price of our stock was
45.13% yesterday and the previous business day. The one-month average price is 45.90%, the three-monthaverage is 42.39%, and the six-month average is 41.23%. The minimum number of shares to be purchased is47,818,900.
This is today's schedule. We will make a public announcement today and begin obtaining the necessary
permits and approvals based on the competition laws of each country. The tender offer will be implemented
promptly upon completion of this, which we now envision to be in early February 2024. We would like to do
it in 20 business days from the start, and that is the current situation.

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We hereby express our opinion in favor of the tender offer. We have recommended tendering shares, andthe reasons for our recommendation are presented on this page.
By utilizing the EQT Group's network or know-how in addition to the management resources and know-how
of the Company's group, and by going private through the tender offer and enabling the EQT Group to invest
management resources in the Company's group, the following synergies can be expected to be generated
through the agile and steady implementation of management measures.
As a result, we will be able to achieve our transformation business plan with speed and quality. With this inmind, we are pleased to make this endorsement and recommendation.
The significance and synergies in this case are described below, in particular, in four points. In the education
business, we expect advancement of digitalization, business efficiency improvement, and diversification ofservices. We thought that EQT's digital team and network would serve us well in this regard.
Also global expansion. While firmly utilizing the EQT Group's overseas know-how and network as well, we canalso expand Benesse's overseas business with more speed than we are currently considering. That's what wethought.
The third point is active utilization of M&A.
In any case, we believe that going private will lead to an increase in corporate value through flexible andprompt decision making.

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The last part of our announcement is about dividends and shareholder benefits.
The tender offer is expected to be made. Based solely on this, the Board of Directors today resolved that nodividends will be paid for FY2023, and that the shareholder special benefit program will be discontinued.
The interim dividend for H1 of FY2023 will be JPY30 per share as planned. For FY2023, we would like to revise
our year-end dividend forecast and decide not to pay a year-end dividend.
In addition, we will also implement a shareholder special benefit plan for the period ending September 30,
2023. On the other hand, the program will be discontinued from March 2024. As I said at the beginning of this,I would like to inform you that we have passed the resolution on the assumption that a tender offer will bemade. That's all from me.
Moderator: Thank you very much. This is the end of my presentation.

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