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

This presentation contains forward-looking statements concerning the future plans, strategies, beliefs and performance of Benesse Holdings, Inc. and its subsidiaries. These forward-looking
statements are not historical facts. They are expectations, estimates, forecasts and projections based on information currently available to the Company and are subject to a number of risks,
uncertainties and assumptions. As such, actual results may differ materially from those projected.

Agenda1. Financial Results Summary for 1H FY2023 and FY23 Earnings Forecasts
2. Progress of Transformation Business Plan

3. Tender Offer for Company’s Shares Announced on November 10, 2023

1

Financial Results Summary for 1H FY2023
and FY23 Earnings Forecasts
Shinsuke Tsuboi
Managing Executive Officer, CFO,
Executive General Manager of Finance and Accounting
Benesse Holdings, Inc.

Financial Results Summary for 1H FY2023

Segment change
We have changed the organizational structure to achieve the transformation of our portfolio
structurer aimed under the Transformation Business Plan. In line with this change, we havealso changed the reportable segments.
Main business
Education
Business
in JapanAbolished

Kids & Family

Shinkenzemi
School & Teacher Support business
Prep schools & Classroom business
University & Working Adultbusiness, etc.
Japan and overseas preschool
Courses (Kodomo Challenge)
Lifestyle business(Tamahiyo, etc.)

New segments
From 2Q FY23

Main business

Education
Business
in Japan

Shinkenzemi
Kodomo Challenge inJapan (preschool)
School & Teacher Support business
Prep schools & Classroom
business, etc.

Nursing Careand Childcare

Nursing Care
Nursing Care Peripheral
ChildcareNewlyestablishedNursing Careand Childcare

OthersNursing Care
Nursing Care Peripheral
Childcare

Corporate expenses,
HQ cost, etc.

University &Working Adult

University & Working
Adult business

OthersOverseas Kodomo
Challenge (preschool)
Lifestyle business(Tamahiyo, etc.)
Corporate expenses, HQ cost, etc.

4Highlights for 1H FY23
Increased sales and income driven by Nursing Care and Childcare Business(Billions of Yen)
230
220

217.4

Net Sales

14

201.9

210

+0.8%

203.5

200

12
Operating
Income10

190

8

180

6

170

4

160

2

150

0

FY21

FY22

FY23

14

Ordinary12
Income 10

¥6

10.5
8.3

+3.2%

8.5

8

12.9

11.4

10.6

+7.9%

FY21

FY22

5.5

5.4

FY21

FY22

FY23

+3.2%

5.6

Net ¥5¥4
Income*
¥3

6
¥2

4

¥1

2

¥0

0

FY21

FY22

FY23

FY23

* Net income attributable to owners of parent

5Change in 1H FY23 net sales by segment (YoY)
Overall increase in sales thanks to increased sales in Nursing Care and Childcare and University& Working Adult Businesses, etc., offsetting the declined sales in Education Business in Japan(Billions of Yen)

−4.1

+0

+3.6

+0.5

+1.4

Education in Japan −4.0

201.9

203.5

～
～
School & Teacher
Support,
Prep Schools &Classroom,
Kodomo Challenge
Peripheral,and Others6Change in 1H FY23 operating income by segment (YoY)
Overall increase in income thanks to increased sales in Nursing Care and Childcare Business,
offsetting the declined sales in Education Business in Japan(Billions of Yen)

+0
−1.3

−0.1

+0

+2.2

Education in Japan -1.5

10.6

11.4

School & Teacher
Support,
Prep Schools &Classroom,
Kodomo Challenge
Peripheral,and Others

7

FY23 Earnings Forecasts

FY23 earnings forecasts highlights
Forecasts announced on May remain unchanged.
(Billions of Yen)
4,500

431.9

423.0

411.8

4,000

250
Operating
Income 200+2.7%

Net Sales
3,500

300

3,000

150

2,500

100

2,000

50

1,500

0

FY21

FY22

FY23

20.1

21.5

20.6

+4.3%

FY21

FY22

FY23

250

Ordinary
Income150

11.0%

7.5%

200

200

15.4

16.0

15.8

+0.7%

100

7.3%

7.0%

ROE 150

0.7%

11.5

11.3

Net
50
Income*

0

3.0%
1.0%

+1.3%

-1.0%
-3.0%

1.0

0

FY22

5.0%

100

50

FY21

9.0%

FY23

-5.0%

FY21

FY22

FY23

* Net income attributable to owners of parent

9

Progress of Transformation Business Plan
Hitoshi Kobayashi
Representative Director and President, CEO
Benesse Holdings, Inc.

Overall picture of Transformation Business Plan
In order to achieve the Group purpose, we will carry out the transformation of our businessportfolio and management systems.

Group purpose

0. Direction

Portfolio strategy

1. Portfolio transformation
Transformationof core businesses(Core Education)

Transformationof core businesses(Core Nursing Care)

Challenges for
new growth(New Fields)

Management system transformation
Corporate transformation

2. Management system toachieve the plan
11

Transformation of Core Businesses

Core Education: Progress with the Transformation Business Plan
We have been implementing measures in line with the Transformation Business Plan.

Transformation ofCore Education business

Next GIGA Program

Long-term: FY26–
Short/medium-term: FY23–25
Transformation Business Plan

1 Product value and sales
method redesigns• Initiatives to maintain/strengthen customerbase• Response to increasingly diverse needs⇒ Improvement in accuracy of abovemeasures through ROI evaluation

2 Cost structure reform
We will review and reduce fixed cost
structures across organizationalboundaries throughout the
Education Business in Japan.

Progress• Propelling sales reform P.14
Strong summer sales• Enhancing products P.15–⇒ Aim to stop the

declining number ofmembers in FY25

Transformation Business Plan

Progress

3 Next generation adaptation• Started development
to take a BYOD
approach in FY25

and business modeltransformation

We will work on transforming businessmodels with the progress of DX as anopportunity.

• Implementing thecompany-wide reformbeyond Core
P.19–
Education

13

Core Education: Product value and sales method redesigns(sales reform in Shinkenzemi)
Summer sales were strong due to a marketing reform.
Initiatives in 1H for summer sales◼ Focused on upstream marketing

Shifted to spend selling expenses on upstream
marketing whose KPIs are awareness raising and trials

Results(elementary school courses to high school courses)

Number of new enrollees◼ Expanded the scope of experiential marketing
Designed trial educational materials early by our target
group of students
Summer trial educational materials

66,044CPO¥36,800

57,575¥31,883

+15%

−13%

FY22

FY22

SAMPLE

Elementary
school courses

Junior high school courses

FY23

FY23

Based on the results of summer sales, we are currently drawing up a sales plan for the peak period of sales.

14Core Education: Product value and sales method redesigns(issues to be addressed in Shinkenzemi)
Increasing children’s learning motivation is the key to recovery of Shinkenzemi business.
Issues to be addressed to increase children’s learning
motivation

Develop and deepen children learning in a
way that attracts their interest and attention- Allow children to learn using multiple media- Propose new ways of learning

Promote the use of our services by lowering
the hurdle for children to study- Allow children to learn using multiple media withsimple ID and simple flow to lead children

Raise awareness among parents and more
involve them in their children’s learning- Motivate children to study and build their self-esteem
by creating opportunities for them and their parents tocommunicate with each other

Enhancing products in FY23 and FY24
(1) New ways of learning to encourage learning,
mastering, and staying as an enrollee◼ Allow children to learn using multiple media, i.e. a combinationof optimal devices◼ Provide several education tools that deepen children learning◼ Provide career advice that aligns with the results of Shinken
simulated exams(2) Reducing stress in learning process◼ Have a simple flow to lead children (simplify ID and improve UI)◼ Allow children to ask questions about subjects at anytime andas often as they like (AI teachers)◼ Deliver information about learning and receive questions andconsultation(3) Motivating children to study by having themconnect◼ Inform parents of their children’s learning progress and allow
parents and children to chat
◼ Have AI teachers and coaches for each high school keep an eye
on children learning and allow children to have connections
with peers
15Core Education: Product value and sales method redesigns(examples of enhancing products in Shinkenzemi)(1) New ways of learning to encourage learning, mastering, and staying as an enrollee
Example in high school courses (FY23)◼ Guide to preparing for university entrance
exams: provide career advice that aligns withthe results of Shinken simulated exams

Example in elementary school courses (FY24)◼ Expansion of the target grades of Nintendo Switch™ software(cover all grades of elementary school courses and livestream
classes of junior high school preparation courses)
Shinkenzemi
Score improvement series
for Nintendo Switch◼ Provision of more education tools that foster thinking skills

Read-aloud projector
for first graders

If enrollees of high school courses send a photo of their results of
Shinken simulated exams from their smartphones, they canreceive an individual review program, a daily study plan, andadvice about applying for entrance exams on an app.
→ Usage rate is 20%–30%. Submission rate is good.
We will see whether this service helps retain enrollees.

AR for fifth and sixth
graders (climate andhistory)

Lunar cruiser to explore themoon with programming forthird graders◼ Programming to improve
problem-solving skills
Provide an app consisting of three categories,
which is tailored to child development stages
Information
ethicsInformation
designProgramming(incl. typing practice)16

Core Education: Product value and sales method redesigns(examples of enhancing products in Shinkenzemi)(2) Reducing stress in learning process(3) Motivating children to study by having
them connect

Q&A service powered by generative AI (FY24)

Smartwatch (April issue in FY24 for first graders at junior

We will introduce an AI-powered Q&A service inelementary school courses (for fourth and higher
graders) and junior high school courses.

AI-powered interactive
service that makes children
want to learn morehigh school and those at high school)

Children can manage their daily to-do list on smartwatch.

It aligns with Shinkenzemi
educational materials

Virtual study room (to be available in January 2024)
Children can study while connecting online in real timewith a teacher and peers nationwide.

17

Core Education: Progress of elementary and junior high school business(School and Teacher Support)
Elementary and junior high school business: enhancing the appeal of Mirai
Seed for GIGA device replacement in FY25
Elementary and junior high school business• The number of schools adopting Mirai Seed
has continued to increase steadily in line withthe progress of the GIGA School Program.
Next GIGA Program (FY25–)

Changes in the number of schools
adopting Mirai Seed
9,010

9,448

Target in FY25:

Over 12,000

7,942(Approx. 40%
market share)

Approx. 6,000• We are enhancing the product and expanding
its customer base for GIGA device replacementin FY25 (making progress as planned)

Strategic investment toward next
generations: ¥1.1 bn in FY23
Teaching and learning support softwarefor elementary and junior high schools

Mirai Seed

• Enhance product appeal• Strengthen follow-up system at schools(e.g., online training sessions)
April 2021

End of FY21

End of FY22

End of
Septemberin 2023

End of FY25
(Target)* Number of schools to adopt
Mirai Seed for five years
from FY2618

Core Education: Progress of the cost structure reform
We established the Operation Transformation (OX) Office within Benesse Corporation
to implement the company-wide and cross-organizational cost structure reform.

Themes for cost
structure reform

Current scaleof costIT
Telephonecontact
SCM

Measures to take for cost structure reform◼ Expand in-house development by integrating an IT function
subsidiary (from July 2023 onward)◼ Cut fixed cost and adopt variable cost by eliminating data
centers

1◼ Review operations through automation (from May 2023 onward)

2

Next-Generation Contact Center Project using generative AI

Approx.
¥34.0 bn

Expected results◼ Integrate logistics hubs and streamline operations◼ Integrate and streamline basic organizations including
functional subsidiaries (from April 2024 onward)

Marketing base

◼ Centralize operations across organizations and promote BPR

Editing◼ Reduce editing processes through automation◼ Increase in-house editing capability by integrating two
editing function subsidiaries (from April 2024 onward)

Others

FY23−¥1.4 bn

FY25−¥3.0–5.0 bn◼ Review outsourcing operations and optimize contracts

Establishment of the OX Office19Core Education: Progress of the cost structure reform
Radically automating and streamlining business processes through Business
Process Reengineering (BPR)
Merger with Benesse InfoShell

2 Next-Generation Contact Center Project◼ Improving the Group’s DX ability by reallocating IT
personnel◼ Aiming to solve customer problems with a hybrid of
operators and AI serving customers 24/7

1

• Increasing the quality and speed of operations byincreasing in-house capabilities and automating operations• Creating more employee capacity through BPR

Benesse Corporation• Automating the member identity verification process witha voice chatbot• Automatically evaluating the quality of customer services
with a speech-to-text tool, among other measures
Anytime → Conversations with an AI chatbot will solve customer problems 24/7.
Short time → AI chatbot will serve a caller waiting to talk to an operator to help solve thecaller’s problem.
Appropriate response → Voice recognition and AI technology will provide accurate
responses in real time.

Number of employees: 419◼ Effect to be brought about by in-house development

FY23
FY24
FY25
−¥1.0 bn ⇒ −¥1.4 bn ⇒ −¥2.1 bn

Put such AI-based
operations into practice at
the contact center

Promote the shift to nextgeneration operations
through solving customer andcompany issues

Assist with the installationof generative AI
technology◼ Cost reduction target by improving productivity

FY23

FY24

FY25

−¥0.5 bn ⇒ −¥1.0 bn ⇒ −¥2.0 bn
20Core Nursing Care: nursing-care facility businessOccupancy rate improved even amid a resurgence of COVID-19 during the July to
September period as we held seminars and events and enhanced our sales activities.
Enhanced sales activities

Recent conditions◼ Occupancy rate was 91.0% at September 30, 2023.
Changes in occupancy rate

Sept. 30, 2023

◼ We actively held seminars and events.
• The number of events we held during the July to September period
increased significantly (6.6 times more than the same period of FY19)• The number of seminar participants increased, and the conversion rate ofinquirers that visit facilities also increased.

Mar. 31, 2023
Mar. 31, 2022

Japan downgraded
COVID-19 on May 8
7th waveMar. Apr.

June

Resurgence

8th wave

Sept.

FY22

Dec.

Mar. Apr.

June

FY23

Sept.

◼ We encouraged visitors to try short stays (trials).
• The number of short-stay users and the conversion rate of them that sign
a long-term contract both increased.

◼ We enhanced our sales activities.
• We enhanced our sales system to accelerate the development of sales staff.

21

New Fields

New challenges for further growth◼ University and Working Adult Business◼ Nursing care peripheral businessNursing care HR and nursing care meals◼ Overseas business

Education business in India

23

Phases in the University and Working Adult BusinessWe aim to grow this business under the existing business model until FY25 and to further grow it
centered on a new business model toward FY30.
FY23–25

FY25–30Grow centered on the existing business model

Further grow centered on a new business model• Further grow Shinken-AD1 and Benesse iCareer2, in addition to Udemy, under the
existing business model• Create a virtuous cycle for improving theorganizational capacity of companies and pursuing
individuals’ careers by making use of the strengthsof learning and more visualizing skills→ Expansion of Udemy, alliance with SkyHive, and expansionof GPS-Business (Global Proficiency Skills)

1. Working to help pursue Japan’s educational reform aimed at
integrating high school education, university education, and theselection of university entrants
2. Working on the recruitment of new graduates• Develop our unique HR and matching business thatconnects “learning and working” → Expand thebusiness through the consolidation of Waris

We intend to further drive business growth across the Groupthrough the allocation of management resources
24

Existing business model of the University and Working Adult Business
The business currently has steady growth with the number of customers steadily increasing.
Net sales and operating income of the business for FY22–23
Net sales

Operating income

200 +6.4%
20.0(Billions of Yen)

213
21.3
1.0
10 +28.2%

FY23

FY22

FY23

results

forecast

results

forecast

Number of Udemy customers
over 1,300

Shinken-AD x Benesse i-Career
Event for corporate recruiters in Oct.

Webinar for university staff in Oct.

(Number of corporate applicants: 81)(Number of applications: 593 persons
from 357 universities)

13
1.3

FY22

Number of companies
adopting Udemy in Japan

Increased customer contacts across the Group

Waris x THANK YOU!

Waris x Benesse Senior Support

Co-hosted webinar for women in Oct.

Co-hosted webinar for companies in Oct.

Numbers as of announcement made in
September 2023
◼ Number of companies adopting
Udemy in Japan: over 1,300 (over
50% of companies listed on the
Nikkei 225 index)

over 1,000◼ Number of users in Japan: over 1.4
millionMarch
FY22
of FY22

As of announcement
FY23
made in Sept. of FY23

(Number of applicants: 319, of which approx.
30% applied through THANK YOU!)(Number of applicants: 38)

25

New business model of the University and Working Adult BusinessWe will make the most of the strengths of learning to establish a new business model.
C

Learning

Clarificationof goals

ExpandingA
Visualizationof current B
status/skills

A B

D MatchingC
Learning

Business
expansion• Udemy customer base is steadily
expandingBusiness
expansion

Visualizationof current
status/skills
D

Matching• Formed a capital and business alliance with
SkyHive and visualized more skills→ Formed a capital and business alliance with SkyHive, a U.S.
company (April 2023)→ Focus on PoC to fully provide services in Japan from FY24
• Expand GPS-Business (internally developed skill
measurement service)• Expand the scope of matching at Waris→ The PMI process is going well after the consolidation of
Waris in June 2023
→ Consider establishing a business model in the matchingbusiness with our target segment being women

Backcasting from FY30, we created a roadmap and currently consider establishing a business model
while constantly updating priorities of the overall strategy.
26

Tender Offer for Company’s Shares
Announced on November 10, 2023

Expressing support for MBO
The Company’s Board of Directors has resolved to express support for a managementbuyout to be conducted jointly by its founding family members and the EQT Group.
•••

The EQT Group has released, on November 10, 2023, a notice on the planned commencement of a tender offer for the Company’s
shares (the “Tender Offer”).
The Tender Offer will be conducted jointly by the Company’s founding members and the EQT Group as part of a series of transactions
constituting a management buyout (MBO) (the “Transactions”).
At its meeting held on November 10, 2023, the Company’s Board of Directors has resolved, as the current opinion of the Company, toexpress support for the Tender Offer and recommend tendering shares therein.

■Outline• Main tender offer conditions- Tender offer price: ¥2,600 per ordinary share; ¥2,600 per American depositary share- Premiums on the simple average closing prices of the Company’s stock on the business day preceding the announcement date of theplanned commencement of the Tender Offer, and for the past one month, three months, and six months: 45.13%, 45.90%, 42.39%, 41.23%- Minimum number of shares to be purchased: 47,818,900 shares* (ownership ratio: 49.56%)- Maximum number of shares to be purchased: N/A• Schedule- Announcement date: November 10, 2023
- Tender offer period (plan): To be commenced around early February 2024 and open for 20 business days (planned to be commenced
immediately after the completion of obtaining necessary permits and approvals under the competition laws and other regulations in therespective countries)* Calculated based on the following formula: the number of voting rights (964,843 units) pertaining to the number of shares (96,484,331 shares) obtained by deducting the treasury shares the Company owns (6,163,798
shares) from the total number of issued shares (102,648,129 shares) as of September 30, 2023, multiplied by 2/3 (rounded up to the whole number; 643,229 units), and deducting the number of voting rights (165,040 units)
pertaining to the non-tendered shares (478,189 units) multiplied by the number of share units (100 shares) of the Company (47,818,900 shares)28

Expressing support for MBO
Reason for expressing support for the Tender Offer and recommending tendering shares
therein
We have concluded that the following synergies can be expected to be generated through the agile and steady implementation ofmanagement measures, which will contribute to the realization of the Transformation Business Plan and further enhancement of theCompany’s corporate value, by utilizing the EQT Group’s network and know-how, in addition to the Group’s management resources andknow-how, and by privatizing the Company’s shares and enabling the EQT Group to invest its management resources in the Group throughthe Transactions.

Significance and synergies expected of the Transactions◼ Improvement of operational efficiency and diversification of services through digitalization in Education Business- Provide new educational services that meet the diverse needs of customers by promoting digitalization and improving operational
efficiency in existing business.
- Utilize the EQT Group’s digital team and network and collaborate with its portfolio companies (investees).
◼ Expansion and sophistication of global business development in Education Business- Expand our overseas business by utilizing the EQT Group’s overseas know-how and network.
- Focus on China, which is the Company’s largest overseas market, and India, which currently is highly strategically positioned in theTransformation Business Plan, in the short term.
◼ Active use of M&A- Actively use M&A in Education Business and Nursing Care Business to achieve the medium- to long-term growth of the Company.
- Utilize knowledge, network, and resources of the EQT Group, which specializes in supporting the acquisition of its investee companies.
◼ Acceleration of decision making by privatization- Build a management structure that enables flexible decision making and increase the speed of business development.
29

Dividend and shareholder benefit plan
In light of the planned implementation of the Tender Offer, the Company’s Board of
Directors has resolved not to pay a dividend at the end of the fiscal year ending
March 31, 2024 (FY3/24), and to abolish the shareholder benefit plan.
◼

Dividend• Pay an interim dividend of ¥30 per share for FY3/24 as planned.
• Revised the year-end dividend forecast for FY3/24 to reflect our decision not to pay
a dividend at the end of the fiscal year.
Note: If the Tender Offer is not commenced or completed, the Company intends to take reasonable measures to
distribute a certain amount of dividends. In such case, the Company will promptly decide and disclose whether
or not dividends will be distributed and the dividend policy and method.

◼

Shareholder benefit plan
• Provide shareholder benefits to shareholders recorded on the shareholder registry
as of September 30, 2023.
• Abolish the shareholder benefit plan from the FY3/24.
Note: We have not yet decided whether to reintroduce a shareholder benefit plan when the Tender Offer is notcommenced or completed.

30

Reference■ About the EQT Group• EQT is a private equity firm founded in 1994 and headquartered in Sweden, with an office network

extending across 20 countries in Europe, Asia, and North America. Currently, the firm’s assets undermanagement total approximately €232.0 bn (approx. ¥37 tn*).

• EQT is engaged in investment activities with a purpose to “future-proof” a company (to transform it
into a company with sustainable value for the future) and create a positive impact on the world.

• EQT originates from the Wallenberg family of Sweden, an industrial capitalist for more than 160 years,
and has an entrepreneurial spirit and a long-term business philosophy.

* Converted at an exchange rate of €1 = ¥160.

31