Benesse Group Transformation Business Plan
Hitoshi Kobayashi
Representative Director and President, CEO
Benesse Holdings, Inc.
May 19, 2023

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 theCompany and are subject to a number of risks, uncertainties and assumptions. As such, actual results may differ materially from those projected.

1. Background and positioning of the Transformation Business Plan
2. Goals of the Transformation Business Plan

3. Contents of the Transformation Business Plan
I. Overall structure of the Transformation Business Plan
II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan
4. Financial and non-financial targets
5. Future strengthening of engagement

1. Background and positioning of the Transformation Business Plan

2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan
I. Overall structure of the Transformation Business Plan

II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan
4. Financial and non-financial targets
5. Future strengthening of engagement

Background and positioning of the Transformation Business Plan
November 2020
(Mid-term management plan)

May 2022(Final accounts: Financial KPI updated)

This Transformation Business Plan is an updated version of themedium-term management plan considering the various peripheral
conditions surrounding the company.

3Medium-term management plan - Results and challenges in Phase 1
Financial
targets
Evolutionofcore
business

Expansion
into
New Fields

Managementfoundation

Slightly missing target in Phase 1: V-shaped recovery from COVID-19 impact• Operating income: FY19 (pre-COVID): ¥21.2bn → FY20: ¥13.0bn →FY22: ¥20.6bn

V-shaped recovery in Education Business in Japan;
Recovery to come in Nursing Care and China; Inorganic growth started• As of FY22, Education Business in Japan achieved V-shaped recovery from FY19.
(Operating income = FY19: ¥14.0 bn ⇒ FY20: ¥11.9 bn ⇒ FY22: ¥19.1 bn)• Full-scale activities launched for inorganic growth. (Variety of learning support businesses
launched; Heart Medical Care made a consolidated subsidiary.)• Businesses of Nursing Care and China Kodomo Challenge still recovering from lingering
COVID-19 impact.

Slightly
missedtargetPartially
lingering
impactfrom
COVID-19

New organization established to take on full-scale challenge for the growth• University and Working Adult Business Company established.
SteadySteady expansion of Udemy business. (Adopted by over 1,000 companies.)
progress• Further acceleration of growth launched in fields of university and working adult.
(Acquisition of Waris; investment and alliance with SkyHive.)• In field of overseas education: Benesse India established, local school education support business launched.

Problematic businesses organized; DX（digital transformation) promoted• Profitability improved with the sale of the underperforming Berlitz business.
• DIP (Digital Innovation Partners), a cross-Group organization, established to promote DX.

Steadyprogress4

1. Background and Positioning of the Transformation Business Plan
2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan

I. Overall structure of the Transformation Business Plan
II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan

4. Financial and non-financial targets
5. Future strengthening of engagement

Goals of the Transformation Business Plan

1

Be a corporate group devoted to solvingsocial issues centered on people

2

Pursue sustainable profit growth throughportfolio structure transformation

3

Establish three pillars of income with Core
Education, Core Nursing Care, and New Fields
6

Goal 1: Solve social issues centered on people at every stage of life
⚫ We will use our business to solve social issues faced by people
Pregnancy, childbirth and parenting• Acceleration in declining birthrate• Response to changes in parenting
environment

Infants, Elementary toHigh school students

University and working adults• Inequality of educational opportunities • Delay in university reform• Children’s declining motivation to learn • Shortage in labor force• Response to changes in school• Changes in required qualities andeducationabilities

Be the most trusted presencein the field of education andlearning by solving structuralissues in education

Be the No. 1 supporter ofindividual and corporate
growth through learning

Seniors• Increase in seniors who need nursing
care services• Shortage of nursing care staff• Delay in DX

Be the top contributor topromotion of individuality andsolution for structural issues(HR, meals)
7Goal 2: Group purpose(Enacted in April 2023)

Anybody can enjoy lifelong growth.
Toward a world in which everyone can live their own life.

Benesse will continue to aim for these ideals.

8Goal 3: Pursue sustainable profit growth through portfolio structuretransformation
Our vision (FY28~)

Goals of current medium-term plan (FY25)

Sustainable profit growth through athree-pillared income structure• Well-balanced profit generation from threeareas: Core Education, Core Nursing Care, and
New Fields

Company-wide Portfolio

Growth driver

Stable growth

New
FieldsCore
Education

Stable profits

Core Nursing
Care*Core Education= Out-of-School Learning + School + K&F
Core Nursing Care= Nursing Care and childcare facilities
New Fields= University and Working Adult, Nursing Care peripheral, and Overseas

Our targeted status for FY25,
backcast from our vision
Stabilized earnings through structuralreforms and response to increasinglyCore
Education diverse needs, etc. Initiation ofbusiness model transformation.
Core
Nursingcare

Quick recovery to pre-COVID-19
occupancy rates. Moving on to stable
growth trajectory.

New
FieldsStrategic investment and sales
growth to drive profit growth in FY26
and beyond.

9

1. Background and Positioning of the Transformation Business Plan
2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan

I. Overall structure of the Transformation Business Plan
II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan

4. Financial and non-financial targets
5. Future strengthening of engagement

[I] Overall structure of the Transformation Business Plan
⚫ In order to achieve the Group purpose, we will organize the direction of entire business throughour portfolio strategy. Based on this, we will formulate transformation plan on existing corebusinesses and transformation plan on new businesses. We will allocate assets in a balancedmanner and restructure the management system to realize the plans.
Group purpose

０. Direction

Portfolio strategy

1. Portfolio transformation,

Transformationof corebusinesses(Core
Education)

Transformationof corebusinesses(Core Nursing
Care)

Challenges
for new
growth(New Fields)

Management system transformation
Corporate transformation

2. Management systems to achieve
the plan11[II-(1)] Current status of the business portfolio
Legend:Core Education
Core Nursing
Carehigh (%)

New Fields

New Fields

Core Nursing Care

Business U
Business R
Business L

Market growth potential

+5~

low

Business M
Business S

0Business Q

Business
Business
K JI
BusinessCore Education

Business B
Business T
Business H
Business C

Business A

Business P
Business F
Business N
Business
Business O E Business D
low0Business G
5Amount of profit

10~(Billions of Yen)

high

12

[II-(1)] Basic policy for portfolio transformation⚫ Priorities of investment and resource allocation in each domain and business clarified.
Strategic investment andresource allocation toaccelerate growth in New
FieldsExamining businessconditions andconsidering forms
of investment andsurvival

Achieving early recovery
and stable growth in Core
Nursing Care businessStabilizing profits in Core
Education business bymaking necessary investments
while evaluating ROI of measures131. Background and Positioning of the Transformation Business Plan
2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan

I. Overall structure of the Transformation Business Plan
II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan

4. Financial and non-financial targets
5. Future strengthening of engagement

[II-(2)] Transformation of Core Education business⚫ Continuing conventional business operations (go-with-the-flow scenario) cannot prevent profitability decline.
⚫ With FY25 as a turning point, we will stabilize profitability by completing a transformation in the entire
Core Education business domain that transcends existing organizational boundaries over the short-,
medium-, and long-term.
Trends in total operating income ofCore Education businesses
Transformation
Business Plan

Go-with-the-flow scenario

Transformation ofCore Education business

Next GIGA Program

Long-term: FY26~
Short/medium-term: FY23~25

１ Product value and sales
method redesigns• Initiatives to maintain/strengthen
customer base.
• 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 organizational boundaries
throughout
the Education Business in Japan.
3

3 Nextgeneration
adaptation andbusiness modeltransformation

We will work ontransforming businessmodels with the progress of
DX as an opportunity.

FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY2615

[II-(2)] <Out-of-School Learning> Redesign products and sales:
Maintain and strengthen customer base (Shinkenzemi)
Children’s motivation and learning ability are declining;needs are becoming more diverse

The gap is widening between students who can self-study and those who cannot.
It is necessary to focus on the latter to maintain the customer base.

We will create triggers that pique children’s interest and enhance individual
communication afterwards to maintain the customer base.
プロダクト

Product

Boost children's motivation and
expectations toward learning witheducational material service• Service throughTM
Nintendo Switch.
• Results triggering
new membership.
• Plan of expanding
target grades andservices.

Communication
コミュニケーション

Marketing
マーケティング

Enhance individual communication
tailored to the customer

Provide constant opportunities toexperience value• Free trial at theNintendo Store.
• Free educational
materials andtrial content
beginning withassessment.

• Coaches foreach highschool.
• Challenge
support calls.

16[II-(2)] <Out-of-School Learning> Redesign products and sales:
Respond to increasingly diverse needs⚫ We aim to maximize LTV by enhancing services tailored to individuals by providing
diverse learning opportunities on Shinkenzemi’s customer base.

Challenge School
We will increase support for children and students with higher
goals through Shinkenzemi upselling products for high level
customers.

We will enhance online learning support for elementary andjunior high school student members of Shinkenzemi.

※

Based on results in junior high courses, support will be
expanded to high school students taking entrance exams todifficult universities and, by FY25, to 5th~6th graders, making
it an elementary/junior/ high school integrated program.

STEAM* courses, for which there is great customer needs, will
be expanded to include Shinkenzemi non-enrollments
while target grades will also be expanded.
* Science, Technology, Engineering, Art, Mathematics* The first-choice school acceptance rate (93.1%) is the percentage of students who had taken both EVERES and the Shinkenzemi Junior High School Course for at least 3 months and who took EVERES until February of their
third year in junior high school (end of the course), who reported their high school and their choice of school in a questionnaire as of July 2022, and answered "passed as first choice" at a national or public high school.

17[II-(2)] <School> Redesign products and sales:
Maintain and strengthen customer base⚫ Mirai Seed will be strengthened to take advantage of software switchover at local
governments and schools, accompanying the device replacement in FY25, as anopportunity to grow.
GIGA School Program (FY20~)
Next GIGA Program (FY25~)
One
1人1台
device端末
per person

Government-fundedsimultaneous deployment.
100% deployment.

Paid
有償
software
ソフトウェアApprox. 90% of local
governments have installed
paid software.

We will have more schools
to adopt it, achieving top
market share
Numberミライシードof schools
adopting
採択校数
Mirai
Seed
(シェア)
(share)Approx. 9,000 schools(30%)

Device replacement and software
switchover

Strategic investment
toward next generation
Teaching and learning support softwarefor elementary and junior high schools

Mirai Seed
• Strengthen product appeals• Strengthen follow-up
system at schools (e.g., online
training sessions)

Further growth of market share
12,000+ schools(Approx. 40%)

* No. of schools adopting it in five years from
FY26

18

[II-(2)] <School> Redesign products and sales:
Maintain and strengthen customer base

⚫ School segment will be reviewed in light of advancement of intra-year entrance exams
and diversification of needs due to university education promoting distinctive features.
⚫ We will link assessment and new services to help students achieve self-set career goals.
Previous

Major
academic/
career paths School needs

Collegeprepschools• Formerimperial
universities• Hard-to-enter
universities• National
universities• Mid-sizedprivateuniversities

Achieve highacademic
goals byfocusing on
generalentrance
exams.

• Local public
universities• Private
universities• Vocational
schools• Employment

Achieveacademic andcareer goals
out of many
possibilities,
includingemployment.

Schoolswithdiverseoptions

Numberof schools

Major
academic/
career paths

School needs

New measures

900
schools• Formerimperial
universities• Hard-to-enter
universities

Focus on generalentrance exams

Assessments & digitallearning services

800
schools• National
universities• Mid-sizedprivateuniversities

General andintra-year
entrance exams

700
schools• Local public
universities• Private
universities

Focus on intrayear entrance
exams

Schoolswith
2,600
diverse schools
options• Private
universities• Vocational
schools• Employment

Manypossibilities,
includingemployment

FutureCollegeprepschools

Midlevelschools

Assessments & intrayear entrance exam
programs

Assessment & careerachievement programs

19[II-(2)] <Local Area>Redesign products and sales:
Respond to increasingly diverse needs⚫ We will strengthen and reorganize branch office functions, which had been centered on highschool sales, to better respond to needs of local governments, schools, etc. increasingly
growing diverse in each region. (Establishment of Area Business Promotion Headquarters)
Regional differences in demographics, educational
environments, working conditions, etc.
Differences in how leadership responds to issues.

Diverse needs in different regions
ICT utilization, teacher recruitment,
Local
governments DX promotion
Preschools

Teachers' work style reforms,
shortage of childcare workers

Elementary
Workstyle reform, inclusive education, curriculum
and juniorhigh schools development and classroom improvement,

evaluation and academic improvement, academic
High schools advancement and career placement support
Universities

Recruitment of exam students, entrance exam
system, employment support and ability
development

Companies

Regional recruitment, DX promotion,
training and capacity building

Measures combining Benesse's assets
Proposals
based ondiversified
needs

Nine branches
nationwide

Prep
Supplementary
school/ Schools
education
classroom

University& working
adult

K&F

① Strengthening relationships with schools and local
governments through new branch operations.
② Creating example cases of product use with innovative
local governments and schools.
③ Providing products and create new business models thatmeet local needs.
(Example) Cooperation with Nara Prefecture‘s “Futoukou
Shien Nara Netto (Nara Net Support for NonAttending Students at School)”20[II-(2)] Cost structure reform: measures under consideration⚫ We will implement company-wide cross-organization cost structure reforms.
Themes for cost
structure reform

Current scaleof costMeasures to take for cost structure reform

IT•Expand in-house development by integrating IT function
subsidiaries.
•Eliminate data centers (cut fixed cost and adopt variable cost).

Telephonecontact•Review automatic operations and optimize "human touch"domains. *Core Education in Japan.

SCM•Integrate logistics hubs and streamline operations.
•Integrate and streamline basic organizations including
functional subsidiaries.

Marketing baseEditing

OthersApprox.
¥34bn•Centralize operations across organizations and promote BPR.

-¥3~5bn•Further expand in-house development.
•Standardize base systems for two editing function subsidiaries.
•Reduce editing processes through automation.
•Review outsourcing operations of all divisions and Group
companies. Optimize contracts, etc.

21[II-(2)] Important turning point in Core Education Business⚫ In our view, FY25 with a shift to the Next GIGA Program is a major opportunity.
We will accordingly promote transformation.
Impact on school andChanges in the business environment

supplementary education businesses

Next GIGA Program• Replacement of devices, one device
per person.
• Cloud migration of school
administration support systems.
• Promotion of assessments with CBT,
utilization of educational data, etc.

Opportunity

FY25• Widening regional disparities in educational opportunities.
• Development of distinctive school curriculums.
• Promotion of teachers’ work style reforms.

ThreatEnvironmental changes to continue• Reduction of teacher workload.
• Widening regional disparities in
educational opportunities.
➡ Increased need for Mirai Seed.
• Increasing ownership rate of students’personal devices due to the
expansion of at-home use of school
devices.
➡ Promotion of BYOD for Shinkenzemi.
• Risk of local governments shrinking
software budgets.
• Risk of shrinking supplementary
education market due to the
expansion of at-home use of school
devices.

22[II-(2)] Long-term (FY26 and beyond) development of next generation
services and business model transformation⚫ We take DX in education, such as the Next GIGA Program (FY25), as an opportunity, andpursue the development of next generation products and services and the transformationof business models.

A

Development of next generation Shinkenzemi
by leveraging an opportunity in BYOD
→ Creation of a business model supported by and used by more families andchildren with more diverse backgrounds.

B

Development of next generation school educationby leveraging an opportunity in cloud migration of school administration→ Creation of a business model to reduce teachers' workload and reform
school education through data utilization.

C

Development of next generation school and student support
by leveraging an opportunity in CBT→ Creation of a business model that starts with assessment and handles dailylearning at school, academic and career paths, and intra-year entrance
examinations.

23[II-(2)](A) Development of next generation Shinkenzemi
by leveraging an opportunity in BYOD
⚫ The "Next GIGA Program" of FY25 will be an opportunity for us to provide a newmodel of Shinkenzemi that solves current fundamental business challenges.

Fundamental
businesschallenges

Widening economic disparities• No longer easy for everyone to take Shinkenzemi.
Cost of providing our tablets• ¥10.5bn per year. *Amount of outflowed cash in FY22.
Non-stopping decline in children's motivation andlearning ability

Opportunities

Next GIGA Program (FY25), increase in personal device ownership• Possibility to engage Shinkenzemi via the Web on any device.

New
Shinkenzemi
model (underconsideration)

Assuming BYOD, Shinkenzemi is a low-cost solution that families
throughout Japan can rely on.
• Improved cash flow.
Shinkenzemi, an "OMO“ classroom, allows everyone to continuelearning.
• Retention rate of those attending tutoring classes is 10%+ higher.
Further enhanced contents/services in response to diverse needs.

24[II-(2)] (B) Development of next generation school education
starting with cloud-based school administration⚫ A cloud-based school administration support system will link assessment and daily learning
data and create a new business model by transforming provided value to reduce teacher
workload and develop the next generation of school education through data utilization.

FY23

FY26~

Assessment
Assessment

Daily learning

Ex: Assessment
Linking data from
Comprehensive
learning and school
Academic
administration
Achievement
Survey,Schooladministration Shinken Simulated
Exams

Ex: Classroom and learning support
Mirai Seed, Classi

Daily learning

Schooladministration

Reducing teacher workload andcreating new value to support
development of next
generation of school education

Ex: School administration support
software EDUCOM

25

[II-(2)] Transformation of K&F China business:
Environment changes, and recovery to growMedium- to long-term business environment

Short-term business environment

While birthrate is declining (number of births fell below 10 million
in 2022 (-1.06 million YoY)), there are opportunities in improving
LTV in the high-income bracket, which is a growing proportion of
the number of births, and moving into lower-tier cities.

Policy shift on COVID-19 and competing businesses scaling
down due to “double reduction policy” significantly reduced
business risk.
Enrollment to our courses suffered decline due to COVID-19
lockdowns, but there are signs of recovery in both retention
and new enrollments.
• FY23 April enrollment: -20% YoY.
• Retention recovering thanks to promotion of digital utilization;
March new enrollment grew YoY.

Growth through recovery in course enrollment and expansion in LTV by FY25 with focus on balanced profit
March enrollment (thousands)

Recovery in course business with focus on balanced profit.

Shortterm

950• Improving retention rate by strengthening digital services and promoting
their utilization.
• Reform in sales structure (variable cost sales such as e-commerce andmember proposal sales, etc.).
• Fundamental review on cost structure.

Expansion in course-type options, improved LTV inrevitalizing KIDS business.

790

Expansion into 3rd to 4th tier cities.

2022

2023

2024

2025

2026

Mid-tolong term Further increase in LTV through expansion of peripheralbusiness areas.

26[II-(2)] Transformation of Core Nursing Care Business:
Environment changes, recovery, and growth
Medium- to long-term business environment

Short-term business environment

Population over 85 years old will increase until 20651.
(Stable demand growth)

Transition to "Class 5“ status of COVID-19 expected toboost desire to move into facilities.
• Steady recovery in number of inquiries and visitors.
• Occupancy rate growth from February to March was +0.53% YoY.

Shortage of nursing care workers will further extend.
(Growing social issue)

In the vicinity of the area we are working on, there areopportunities in areas with many affluent seniors.

• 690,000 more nursing care workers are needed in 2040
compared to 20192.

Recovery of occupancy rate through measures to encourage the desire to move into facilities andreinforced sales capabilities and management

Occupancy rate trends

96.0%

95.9%
95.2%

93.9%

96.0%

Building relationship with local hospitals andcare managers;
Short stays (trials) to motivate moving in.

• Short-stay users in FY22: 2,863 cases (+191% YoY).
Of these, 665 (23%) became long-term contract users.

92.6%

90.1%

90.4%

Reinforcing sales capabilities and management.
Expanding new areas for property development.

Effect of COVID-19
1. Source: National Institute of Population and Social Security Research website (https://www.ipss.go.jp/)
2. Source: Ministry of Health, Labour and Welfare, "The Number of Nursing Care Workers Needed Based on the Eighth Long-Term Care Insurance Project Plan (https://www.mhlw.go.jp/content/12004000/000804129.pdf)

27

Confidential

1. Background and Positioning of the Transformation Business Plan
2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan

I. Overall structure of the Transformation Business Plan
II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan

4. Financial and non-financial targets
5. Future strengthening of engagement

Confidential

Challenges for new growth:
University & Working Adult BusinessChallenges for new growth: University and Working Adult BusinessChanges in thesociety

Changes in theworld
Changes inJapanBenesse’suniquestrengths

Drastic changes in the nature of work and skills required due to DX/GX and other major changes in society.
• World Economic Forum meeting at Davos promised to provide reskilling opportunities to 1 billion
people.
Demand for “creating a society where everyone can learn and build a career throughout their lives.”• With declining working population, there is a need for more people to hold secondary and concurrent
jobs, and for women and seniors to actively participate in the workforce.

Activities inprivate sector

Mandatory disclosure of human capital and enhanced investment and development of human resources
for sustainable growth (compliance to DX/GX).

Activities ingovernments

Announcement by government on reskilling: ¥1 trillion investment over 5 years.

Easy-to-understandteaching
techniques• Utilization of teaching
techniques that are easy for
all to understand.

Broad customer
base• Udemy customer base.
• Benesse’s customer base(Students/Women).

Support not only
for learning, butalso for careerdevelopment• Expansion of capabilities beyond“Learning” to "Visualization ofcurrent status/skills" and "Human
resource matching business,“ anddevelopment of the business.

30

Our vision as a University and Working Adult Business Company⚫ We will engage in matching business through supporting reskilling in companies ( 1 ) andfor individuals ( 2 ).
1 Companies (To B)

Individuals (To C) 2

Clarificationof goalsClarificationof goals

A

A(Personal/
Career)(Corporate/
HR strategy)

Visualizationof current B
status/skills

Recruitment/
DTransferC

Learning(Corporate
training)

Matching

Visualization
B of current
status/skills

FindingD
employment

C

Learning

Government (To G) Government announced ¥1 trillion investment in reskilling.

Schools (To S) Providing career support via schools.

3131Market outlook for 2030
⚫ All markets are expected to expand significantly toward 2030 in response to changes insociety and demands from public and private sectors.
1 Companies (To B)

Individuals (To C) 2

(Billions of Yen)
18

23

2022

2030

Clarificationof goalsClarificationof goals

A

A(Personal/
Career)(Corporate/
HR strategy)

Visualizationof current B
status/skills

Recruitment/
DTransfer

Matching

2022

530
2030

1.5

2022

2030

Visualization
B of current
status/skills

FindingD
employment

C
200

1

C

Learning(Corporate
training)

18,000

Learning

Currently noestablished market

10,000
520

720

2022

2030

2022

2030

A in ToB business is the HR/strategic consulting market, B is the talent management/assessment market, and C is the corporate training market.
A in ToC business is the career coaching market, and C is the personal learning market.
D (Matching) in ToB and ToC businesses is the temporary staffing, placement and crowdsourcing market (total for all industries).

350

380

2022

2030

32
32

Process of reskilling support business’s expansion⚫ Starting with learning centered on C Udemy, we will expand business byinvesting in B SkyHive and making D Waris a subsidiary.
⚫ Our aim is to build a business model capable of providing comprehensive support for reskillingboth in To B and To C.
Expanding business to include
visualization of current status/skills

Clarificationof goals

Expanding business from learning tovisualization of current status/skills

Expanding business to include matchingA
Visualizationof current B
status/skills

D Matching

Expanding business beyond learning
to matching (recruiting, transferring,job hunting, changing jobs) throughreskillingC
Learning

Business
expansion

Business
expansion

33

Udemy’s customer base and sales trends⚫ Udemy has been adopted by over 1,000 companies andhas over 1.3 million individual members.
⚫ Sales growth has been strong and steady with triple-digit growth in the last three years.
Udemy’s customer base

Udemy’s sales trends

Adopted by 1,000+ companies (March 2023)

Companies

Domestic
users

50%+

90%

50%+

Companies
selected for
Nikkei 225

Companies selected
as model companies¹
for human capitalmanagement

DX Stockcompany
selected by
METI

Over 1.3 million members (March 2023)

FY20-22++138%
104%

FY20
H1

1. Nineteen companies in METI's "Report of the Study Group on Improvement of Sustainable Corporate Value and Human Capital.”

FY20
H2

FY21
H1

FY21
H2

FY22
H1

FY22
H2

34

Leveraging Benesse's customer base
⚫ Benesse has a broad customer base of high school students, university students, and working
adults. Leveraging this customer base, Benesse is working to B visualize current status/skills
through SkyHive and provide various types of C learning and D matching services.
Benesse's customer baseHighschoolstudents

Boasting approx. 1 million UU
log-ins by members.
• Capable of reaching almost
all high school students.

University
students

Job hunting support service for
new graduates.
Approx. 970,000 members.

Clarificationof goalsA
Visualizationof current B
status/skills

D Matching
C

Used by 75% of first-time
mothers.
Working
adultsMedia providing lifestyle
information, with magazines of
1.64 million circulation (as of2021) and website of 6.41
million visitors per month.

Learning

Business
expansion

Business
expansion

35

Examples of business initiatives in collaboration with government (1/2)⚫ We also provide reskilling support in collaboration with the government through Udemy.
Further growth will be achieved with as a tailwind of the government's ¥1 trillion investment.
Overview of Udemy’s support for government
1Company
reskilling

For local
companies

For
government
personnel

2

Government implements projects to
support DX in SMEs.

• Tokyo, Saitama, Tottori prefectures, etc.

Develop government personnel intoDX human resources.
• Mie prefecture
Government pays for individual learningand supports job seekers' learning.
• Nara* and Tottori prefectures

Personal reskilling* Executed in FY2022.

Specific example
Tokyo’s
DX Human Resources Reskilling
Support Project• Developing DX human resourcein 250 SMEs through Udemy.

Nara Prefecture’s*
Employment-based Recurrent
Education Program• Paying salaries from subsidies tosupport job changes.
• Supporting job hunting withreskilling.

36

Examples of business initiatives in collaboration with government (2/2)⚫ Benesse leads support of reskilling activities in municipalities by establishing and operating National
Municipal Reskilling Network of 45 municipalities across Japan that promotes the exchange of information
among municipalities and the provision of information from experts.
Outline of initiatives

Background of establishment

Benesse acts as a hub to establish National Municipal
Reskilling Network to expand knowledge of reskillingin municipalities.

Growing need for DX human resource
development• Needs for DX are expanding due tostaff shortages and changes in theexternal environment.
• Increasing number of municipalities
engaged in reskilling.

• Operation of an information sharing platform– Sharing examples of advanced municipalities and case studies.
– Sharing information and best practices from experts.
– Operating subcommittees based on themes.
(DX promotion in local companies, government personnel
development, and individual reskilling)

Kick-off event held on May 10th
• Out of 45* municipalities whoannounced participation in
network, 14 participated in
the event.
*As of May 10, 2023

Municipalities facing challenges ingathering information and sharing
knowledge
While many want to refer to priorexamples, the lack of a place forexchanging information is an issue.

37

Sales plan figures⚫ We aim for sales of ¥100bn in 2030 from current sales of ¥20.1bn.

Sales plan for University and Working Adult Business(Billions of Yen)

100.0

+22%%
+22

65.0

40.0

20.1

2022
(Results)

2023

2024

2025

2026

2027

2028

2029

2030

38

Challenges for new growth: Nursing care peripheral

39

Growth direction of nursing care peripheral fields⚫ We will develop a diverse nursing care peripheral businesses centered on facility-based care.
⚫ We will achieve further growth by focusing on nursing care HR and nursing care meals, whichhave attractive market conditions that allow us to leverage our strengths.
: Market growth rate over 5%1: Market growth rate below 5%1

Seniorhousing

Customerreferral

A Nursing care HR businessNursingcare HR

Facility Care/
Home Care

Assistive
products

Nursingcare
meals

Nursingcare DX*Under consideration

1. All market growth rates are forecasts for 2022 to 2028.

• High market growth rate (5%)1– Opportunity in attractive matching of job
seekers and care providers as demand forhuman resources increases.
• Strengths in knowledge cultivated through existing
HR business and deep customer understanding.
B Nursing care meals business• High market growth rate (10%)1– Opportunity in prepared nursing care meals to
make up for shortage of cooks.
• Strengths in difficult-to-imitate cooking techniques
for delicious and safe food, honed through theprovision of meals to patients at our own facilities.
– 5,000 meals/day (8 year track record)40

A Approach to Nursing care HR business strategy⚫ Our aim is further business expansion based on a deep understanding of customers cultivated through thefacility business and knowledge gained from the existing nursing care HR business.

Scale of nursing care HR market1(Billions of Yen)

220.0

162.6

2022 (Results)

We will pioneer the nursing care HR market by providing
a variety of systems to meet diverse employment andwork needs.
Existing businesses

+5
%
+5%

Outline of initiatives

2028 (Estimate)Temporarystaffing

Business expansion at Benesse MCM• Expanding business through geographic
expansion.

Personnel
placement

Implementation at Heart Medical Care
• Utilization of Nursing Care Antenna(110,000 registered users).

Mediabusiness

Ad posting business conducted byHeart Medical Care
• Expansion of Nursing Care Recruitment Navi.
• Expansion of municipalities issuing Heart Pages.

New businesses

1. The figures for nursing care HR market are calculated based on the number of people requiring nursing care services.

Plans to work on new HR projects to meet morediverse needs of workers and employers.

41

B Approach to Nursing care meals business strategy⚫ We will expand the prepared nursing care meals business in a B2B format to meet growing needs
due to the increasing population of seniors over 85 years old and labor shortages.
Outline of initiatives

To B: Scale of prepared nursing care meals market1

To C

Home/
People withdysphagia Home-based

To B

People withdysphagia

Nursing home/
hospital(Billions of Yen)
• Population of seniors over 85 will reach 8.31
million in 2030.
• As a result, the number of people with dysphagia
who need nursing care meals will increase.

+10%
+10%

Benesse Palette provides nursing care meals• Nursing care facilities are shifting from on-sitecooking to factory cooking (prepared nursing caremeals) due to staff shortages.

95

54

2022
1. The market for prepared nursing care meals is an estimated value calculated by taking into account the shift from on-site preparation to factory preparation,in addition to the increase in the need for nursing care meals.

2028(Estimate)42

Nursing care meals business: Product overview and competitive edge
⚫ We will develop into the market by delivering products that enable enjoyment of eatingand high level of safety that only Benesse can provide.
Benesse’s nursing care meals

Strength of our products

Palatable

Soft foodPureed foodSafe

• Excellent flavor and appearance that makes
eating enjoyable.
– Prepared foods, not ingredients, are pureed• Full lineup of 120 items.
– Competitors offer 90 items at most.

• Reducing aspiration risk with our uniqueknow-how.
– Individual adjustment for each dish toprevent water separation.
• Physical properties (hardness, etc.) incompliance with industry standard UDF1.

1. UDF (Universal Design Food) is a voluntary standard for commercial nursing food established in 2003 by the Japan Care Food Conference, an industry organization.

43

Business plan figures for nursing care peripheral businesses⚫ We aim for sales of ¥30bn by 2028 through expansion of nursing care HR
and nursing care meal businesses.
Sales plan
(Billions of Yen)

30

Nursingcare HR

+35%
+35%
12

Nursingcare meal

5

2022(Results)

2023

2024

2025

2026

2027

2028

44

Challenges for new growth: Overseas

45Basic policy for overseas business development

1

Develop in domains (education/nursing care related)
where the company has strengths and know-how,rather than in unrelated areas.

2

3

Base the strategy on deep commitment to a
specific country, rather than a global development
strategy (e.g., K12 education in India).

However, in areas where we have knowledge but
insufficient organizational capacity, consider scenarios
involving M&A as a starting point or booster.
46

[School education support business in India] Background and outline⚫ We established a local subsidiary in India in March last year and began a school education support business.

India’s appeal

Business overview

Vast student population and rapid market growth⇒ Approx. 300 million students in elementary through highschool. Yearly growth of school education market 10%+.
Foreign investment unrestricted, no need for licenses⇒ Educational publishing, IT/internet business also possible
with own capital.
Education and entrance exam system similar to Japan’s⇒ Benesse's know-how and strengths easy to utilize.

Opportunities from changes in conditions
In 2020, the Indian government announced the National
Education Policy 2020, the first major education reform in
34 Years.
• Reinforce “school-centered learning.”• Shift from knowledge-based education to thinking
ability-focused education.
• Raise university enrollment rate from 26% to 50%.
• Introduce Common University Entrance Test around2025.
• Introduce the National Achievement Survey.

Assessment,
analysisStudent
supportMentorships

Teacherand schoolsupport

Digital tools
Teacher

Assessments

School and teacher
supports

Student47

[School education support business in India]
Activities in the first year of establishment of local subsidiary⚫ We provided paid services to 20 schools in Delhi suburbs in the first year of establishment.
New customer
development

Assessment

to S

Analysis session andteacher support

Mentorship service
to C

Tutor

LeaderStudent

ParentHead coach48

[School education support business in India]
Future development and goals
Priority activities for this year and the next

Our vision

1. Refine customer value of assessment andproduce (initial) customer success stories.
2. Expand customer base of assessment.
(region/target grades/subjects)
To become the most trusted partner

3. Expand mentorships.
4. Launch products compatible with theCommon University Entrance Test (CUET).

To become one of the pillars ofGroup growth

Sales
¥30bn

5. Strengthen organization and develop
partners to scale up.
49

Confidential

1. Background and Positioning of the Transformation Business Plan
2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan

I. Overall structure of the Transformation Business Plan
II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan

4. Financial and non-financial targets
5. Future strengthening of engagement

[III] Transformation of management systems to achieve the plan
⚫ To achieve portfolio transformation set forth in the Transformation Business Plan, we will establish,
through management and corporate transformation, a system in which top management and CXO
can drive execution.

Key points in portfolio transformation

Management and corporate transformation

1. Strengthening resources and optimizing
their allocation from a company-wide,
medium- to long-term perspective.

A)
A Reconstruction and reinforcement of system led
by CXO to achieve the goals of Transformation
Business Plan.

2. Management decision-making based on
appropriate evaluation of ROI of key
measures in core businesses and businesspotential of low-profit businesses.

B)
B Construction of management system where top
management allocates resources across thecompany.

C Improvement of corporate productivity.
C)

3. Improvement of management team’s
capacity, expertise, and productivity todrive achievement of Transformation
Business Plan goals.
51Confidential

1. Background and Positioning of the Transformation Business Plan
2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan

I. Overall structure of the Transformation Business Plan
II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan

4. Financial and non-financial targets
5. Future strengthening of engagement

[Financial target (1)]November 2020 medium-term management planvs. the Transformation Business Plan
Current medium-term management plan

Transformation Business Plan①

Net sales
FY25
Operating income¥500bn+¥40bn+

No. Financial KPI
Operating❶income*②

Operating income FY25
ratio

8%+

❷

ROE

FY25

10%+

③

ROE

FY23
(Pulled infrom FY25)

10%+

❸

Sales growthin new fields

FY22-25

Double FY22
sales as of FY25

Net sales
Organic growthrate

FY23-25

3%+

No. Financial KPI④⑤

Timeframe

Operating income FY23-25
growthContribution frominorganic means
and new fields

Numerical target

20%+

Timeframe
FY25

Numerical target¥32bn+

Portfolio structure vision for FY28:
Well-balanced profit generation from threepillars: Core Education, Core nursing care, andnew fields** Goodwill from future M&As are excluded.

53

[Financial target (2)] Portfolio structure vision for FY28
(Operating income for FY22-25-28)⚫ We aim for well-balanced profit generation from three pillars of operating income.

FY2022
New Fields 2%

72%Core Education

FY2028

New Fields

10%

26%

Core
NursingCare

FY202535%

Core
Nursing
Care

30%

New Fields

55%

Core
Education

35%
Core
Education

35%
Core Nursing
Care54

[Financial target (3)] Cash and investment allocation⚫ The investment plan allocates approx. 50% of them to new fields.
We also make Investments in core business transformation while verifying ROI.
Cash allocation (FY23-25)
3-yr. cumulative cash position in FY23~25 : approx. ¥124bn

Investment plan (FY23-25)
Percentage of total

Use 1: Core business transformation

Use 2: New field growthBusiness investment(CAPEX, etc. *Excluding lease assets,
long-term prepaid expenses, etc.)

Business investment(M&A、CAPEX, etc.)(Approx.) ¥50bn(Approx.) ¥53bn

Use 3: Shareholder returns and strengthening of financial base
[Shareholder returns]
With lower limit of dividend payout
ratio at 35%, dividends to increase
continuously thanks to increase in net
income after taxes.

Core
Education

30%

Core Nursing
Care

20%

New Fields

50%[Strengthening of financial base]Some retained earnings for recovery of
30% equity ratio in FY2025 and for
future investments

100%

55

[Priority KPI by business field]⚫ To achieve the Transformation Business Plan, we will set priority KPIs for each business fieldaccording to the targeted status.
[Business fields][Targeted status][Priority KPI]

Stableprofits◼ Change from quantitative indicators (enrollment numbers,etc.) to qualitative indicators⇒Consider leading indicators(customer satisfaction, NPS, duration of continuous use,
degree of learning, etc.)

Core Nursing Care

Stablegrowth◼ Add qualitative indicators to quantitative indicators⇒Occupancy rate: 96% at end of FY24
(Leading indicators: number of requests for materials,
number of tours)⇒Also consider NPS and other indicators

New Fields

Growthdriver⚫ Focus on quantitative indicators⇒Sales(Double FY22 sales by FY25, etc.)

Core Education

56

Confidential

1. Background and Positioning of the Transformation Business Plan

2. Goals of the Transformation Business Plan
3. Contents of the Transformation Business Plan
I. Overall structure of the Transformation Business Plan

II. Portfolio transformation(1) Portfolio strategy(2) Transformation of core businesses(3) Challenges for new growthIII. Transformation of management systems to achieve the plan
4. Financial and non-financial targets
5. Future strengthening of engagement

Future events of strengthening engagement

IR events for FY23
Business briefings sessions by segment• Conducted in the Nursing Care Business in FY22

2nd ESG briefing session

58

Confidential