Benesse Holdings, Inc.
FY2021 2Q Consolidated Financial Results Briefing
November 5, 2021

Event Summary[Company Name]

Benesse Holdings, Inc.

[Company ID]

9783-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]FY2021 2Q Consolidated Financial Results Briefing[Fiscal Period]

FY2021 Q2[Date]

November 5, 2021

[Number of Pages]

35[Time]

16:00 – 17:17(Total: 77 minutes, Presentation: 53 minutes, Q&A: 24 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

SupportJapan
Tollfree03.4405.3160
0120.966.744

2
Hitoshi Kobayashi
Shinsuke Tsuboi

North America
Email Support

Representative Director & President, COO
Executive Officer, CFO, Managing Director of
Finance and Accounting

1.800.674.8375
support@scriptsasia.com
1

Presentation

Tsuboi: Good evening, everyone. I, will now provide an overview of our business results for the first half ofthe fiscal year ending March 31, 2022, and our outlook for the full year.
First of all, I would like to explain the FY2021 1H business highlights on page 2.
Net sales increased 4.0% YoY to JPY217.4 billion. Operating income increased 58.2% YoY to JPY12.9 billion.
Ordinary income increased 108.5% YoY to JPY10.5 billion. Net income increased 145.3% YoY to JPY5.5 billion.
All of them have recovered significantly from the previous fiscal year, which was greatly affected by COVID19.
Although we have not yet reached the level of FY2019, we believe that we are off to a good start toward ourgoal of achieving operating income in FY2022 that exceeds that of FY2019, which we set in our medium-term
management plan.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
2

Next, on page 3 is the operating income by business segment for the first half.
The following is a waterfall chart showing comparisons with FY2020 by segment.
The figures in this chart incorporate the impact of the revenue recognition standard that became effective inthe current fiscal year. Later, we will also explain the impact on accounting by segment.
The Shinkenzemi business posted a decrease of JPY0.8 billion, while the school and teacher support, cramschools, and English EducationBusinesses , which had suffered a significant decline last year, made a V-shaped
recovery and posted an increase of JPY4.7 billion.
Profit decreased slightly in K&F, nursing care and childcare businesses.
And the Berlitz business, while in the red, showed a significant improvement in profitability, with a differenceof JPY1.8 billion from the previous fiscal year.
This is how we achieved the operating income of JPY12.9 billion this fiscal year from JPY8.2 billion in the same
period of the previous year.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
3

I will now move on to report on the status of each segment. In this section, I will explain the YoY comparisonof net sales and operating income, the impact of revenue recognition standards, comparison with FY2019
levels, and the factors behind the earnings impact.
First of all, page 4 shows the status of Shinkenzemi in education business in Japan.
Net sales decreased by JPY0.7 billion and operating income decreased by JPY0.8 billion compared to theprevious fiscal year. However, the adoption of the revenue recognition standard led to decreases of
JPY0.9billion on net sales and JPY0.6 billion on operating income. Excluding these factors, the actual difference
between the results of the previous fiscal year and the current fiscal year is an increase of JPY0.2 billion on
net sales and a decrease of JPY0.2 billion on operating income.
In addition, as you see, both net sales and operating income are significantly higher than the FY2019 level.
Last fiscal year, schools and cram schools were closed due to the COVID-19 pandemic, which was a tailwind
for the correspondence education business, but this fiscal year due to the absence of that, total enrollment
in the first half was slightly lower than the previous year.
Although the number of enrollments at the beginning of the fiscal year was higher than the previous year, theretention rate was lower than expected. However, we are analyzing the cause of the problem and taking
countermeasures, and the retention rate has been on a recovery trend since October.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
4

In addition, the increase in the unit price per customer due to the price hike of some services and the strong
sales of optional teaching materials, such as programming courses, have offset the impact of the decline intotal enrollment and the increase in costs due to the revision of textbooks.

Next, on page 5 is the status of education business in Japan, school and teacher support business, and cramschools & English education.
Net sales in the school and teacher support business increased by JPY1.7 billion, and net sales in theprepschool business increased by JPY5.4 billion over the previous year, while operating income in bothbusinesses increased by JPY4.7 billion in total.
Since the adoption of the revenue recognition standard had only a negative impact of JPY0.1 billion on both
net sales and operating income in this business, the actual difference excluding this impact is an increase of
JPY4.6 billion on operating income from the previous year.
Compared to FY2019, net sales in the school business are still slightly below the FY2019 level, but sales in thecram school business have already surpassed the FY2019 level, and operating income is close to the FY2019
level.
In the school business, the Shinken Simulated Exams, which declined last fiscal year due to the impact ofschool closures, recovered steadily, as did the business for elementary and junior high schools, including Mirai
Seed, which benefited from the tailwind of the Japan’s GIGA School Program.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
5The cram school and English language school businesses have also made a significant recovery, and thenumber of students enrolled has reached the level it was before the pandemic. In particular, our mainstay
prep schools, Tokyo Individualized Educational Institute and Tetsuryokukai, have already achieved higher
profits than FY2019.
There was a slight decrease in the number of inquiries this summer, partly due to the declaration of a state of
emergency, but we are now on a recovery trend.

Next, let's move to page 6, K&F.
From this fiscal year, we have combined Kodomo Challenge and Tamahiyo businesses into the same segment.
This is the status of the K&F business.
Net sales decreased by JPY0.1 billion and profit decreased by JPY0.3 billion compared to the previous fiscal
year.
In this segment, the gross number of mail-order sales was changed to the net amount according to therevenue recognition standard. The impact of this change was negative JPY1.1 billion in net sales and less than
JPY0.1 billion in operating income. Excluding these factors, the actual difference between the results of theprevious fiscal year and the current fiscal year is an increase of JPY0.9 billion in net sales and a decrease of
JPY0.2 billion in operating income.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
6Compared to FY2019, net sales were slightly below the previous fiscal year's level, while operating income
was almost the same level.
In Japan, the Kodomo Challenge business experienced a decrease in total enrollment, but net sales and profits
increased due to an increase in unit prices per customer as a result of price increases and a recovery in noneducation businesses, such as the concerts business.
On the other hand, the Kodomo Challenge business in China saw an increase in net sales due to the significant
positive impact of foreign exchange rates, despite a slight decrease in enrollment. However, profits decreased
due to an increase in selling expenses.

Next is page 7, the status of the nursing care and childcare businesses.
Net sales increased by JPY2.5 billion, and operating income decreased by JPY0.1 billion compared to theprevious fiscal year.
In the first half of this fiscal year, the accounting impact of the adoption of revenue recognition standards,
which was initially expected to have a negative impact, resulted in a positive effect of JPY0.8 billion on net
sales and operating income.
Let me go into some detail about the background. As the occupancy rate declined, this year's lump-sum sales
were deferred to future years. Sales that were recorded as advances received in the past were exceeded bysales that were put back into the current fiscal year. And the amount of depreciation at the time of moving

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
7

out was more than we had expected. These are positive factors due to the adoption of the revenue recognition
standard.
Excluding these factors, the actual difference is an increase of JPY1.7 billion in net sales and a decrease of
JPY0.9 billion in operating income compared to the previous fiscal year.
The main reason for the increase in net sales is the expansion of the number of homes. This is an increase of
8 homes compared to the same period last year, bringing the total to 342.
In comparison to FY2019, net sales were higher than the previous fiscal year, but operating income was lower
than the previous fiscal year.
The occupancy rate continued to decline in the first half of the fiscal year due to the continued impact of the
COVID-19 pandemic and dropped to 89.8% in September. However, due to the progress of vaccination andthe rapid decrease in the number of COVID-19 infections, the number of visitors in October exceeded the prepandemic FY2019 figures, which is a positive sign.

Lastly, on page 8 is the status of the Berlitz business.
While net sales decreased by JPY0.5 billion from the previous fiscal year, operating income improved by JPY1.8
billion. There is no accounting impact from the adoption of revenue recognition standards in this segment.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
8

BTS, the language business, saw a slight increase in net sales compared to the previous fiscal year, but the
ELS business, the study abroad business, saw a significant decrease in net sales due to the impact of thepandemic, which was the main reason for the total decrease in net sales.
On the other hand, the operating deficit was significantly improved due to the large reduction in fixed costs
resulting from last fiscal year's large-scale lay off.
In comparison to FY2019, while net sales were down significantly due to the prolonged impact of thepandemic, the consolidation or closure of classrooms and the shift to franchising in businesses outside of the
major countries, profit and loss were at the same level.
The new strategic product, Berlitz 2.0, has already been released worldwide.

Page 9 shows the forecast highlights for the full year FY2021.
The full-year forecast for operating income remains unchanged from JPY17.5 billion.
Although we have made good progress in the second quarter, we expect that we will need to incur certain
countermeasure costs in light of the decline in total enrollment in the Shinkenzemi business, additional
investment to secure enrollment to support our revenue base in the next fiscal year, and preparation for risks
in the China business.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
9This is the last item from me. Page 10.
In terms of dividends, we plan to maintain a dividend of JPY50 per share for the current fiscal year from theperspective of stable dividends.
That's all from me.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
10

Kobayashi: Thank you all for taking time out of your busy schedules to participate in the financial results
briefing of Benesse Holdings, Inc.
Now, I would like to talk about the progress of our strategy, focusing on the status of this first half and theoutlook through the end of the fiscal year.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
11On page 12, I would like to reiterate the position of the current fiscal year in the medium-term management
plan that we announced to you in the previous fiscal year.
In our 5 years medium-term management plan, we have set the goal of first achieving a V-shaped recovery
from the pandemic through organic growth in existing areas over the 2 years, FY2021 and FY2022. The firsthalf of FY2021 has just ended.
Positioning the second half, which is 3 years from FY2023 to FY2025, as the period of challenge and growth,
we have set a goal in our mid-term management plan to achieve results by firmly building in organic growthin existing businesses and challenges in new areas, as well as organic growth.
The financial targets are also as listed here. In particular, for the last 2 fiscal years, Phase 1, we are startingwith the idea that we will recover sales and profits in FY2021 and FY2022 over FY2019, which is before the
COVID-19 pandemic.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
12Next page, please.
In this context, I would like to reiterate that the first half of the fiscal year has just ended, and we are now
making announcements.
On page 13, I would like to briefly explain the direction of each of the projects in Phase 1, including somechanges that have been made.
First of all, the Shinkenzemi division has been strengthening the use of digital technology for the last fiscal
year, or even since before that, and the rate of course selection for digital courses has increased significantlyin April. Therefore, by strengthening the use of digital courses and encouraging students to take advantage ofthem, we will increase the retention rate. We have talked about this policy in the past, and we will continue
to do our best to follow this policy.
On the other hand, I believe that we still have a big challenge left in marketing innovation. The idea is to moveaway from direct mail marketing to digital marketing, where customers understand the content and finally
apply for the services. We are still in the middle of developing a new marketing approach that follows thecustomer journey, and we have started to work on it.
And the expansion of a variety of learning platforms that will lead to inorganic growth of Shinkenzemi. I willtalk about this in more detail later, but we have actively been providing a variety of learning opportunities for
Shinkenzemi subscribers in addition to school subjects. So, later I would like to talk about the figures we havearchived through the initiative and the future strategies we will work on.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
13

Prep schools and English education business. I mentioned earlier that we would make a V-shaped recovery
over the next 2 fiscal years, and in fact, we had set a goal of making a V-shaped recovery this fiscal year forcram schools and English language schools from the beginning of the fiscal year. As Mr. Tsuboi mentioned
earlier, the first half of this fiscal year has been extremely strong. In this business area, we feel that we can orshould be able to expect a recovery from the COVID-19 pandemic within a year, to meet the forecast at theend of the fiscal year.
The next is about the school business. We've changed the direction we take a little bit.
Schools are becoming more responsive to the COVID-19 pandemic and entrance exam reforms. There aresome things that have become quite clear to me. In response to what I have seen, I have been thinking deeply
for the past 6 months about how to support school education by formulating strategies that are firmly
grounded in the changes in learning in schools and the problems faced by teachers.
The first is the GIGA school program. This is the GIGA school program for compulsory education, which I will
explain later. We have reached the point where many schools and local governments are using our products,
mainly Mirai Seed.
And then there are the higher education focused Shinken Simulated Exams and other assessments. For thisone, we are trying to slightly change the way we have been thinking about customers and school groups. With
the new entrance exam reforms, more and more students take examinations for candidates selected by
special recommendation. So, we have divided the schools into 3 levels and are now rethinking our strategy inthe area of higher education by changing the combination of assessments to be most useful for these 3 levelsof schools.
Next is about Kids and Family. In the last briefing, we explained that through the organizational reform in Aprilof this year, we have consolidated the former K&F, or Kids and Family, which was mainly engaged in the
Tamago Club, Hiyoko Club, and Kodomo Challenge into a single company.
The purpose of this is to link the customer contact points of Tamago Club and Hiyoko Club to Kodomo
Challenge. By strengthening this collaboration, we aim to ensure that customers can use Benesse for a longtime.
We are making progress in this area, and in April next year, Kodomo Challenge will finally start its digitalcourses. I think the key to success in this area is to make a solid start and how we can grow further.
As for China, there have been a number of major changes in the past 6 months, such as intensifying
competition and the policy transformation of study burden cut by reducing homework load and cram schools,
also known as the nationwide “double reduction” policy. We are now examining how to respond to thissituation and how to change the business model itself. I would like to talk about the current status of this later.
Nursing care and childcare is the area that was greatly affected by COVID-19. The occupancy rate is now below
90%.
However, as you all know, the pandemic situation is now improving a little in Japan, and inquiries andoccupancy are showing signs of recovery. In that sense, I think it is quite possible to say that the nursing carebusiness depends on the development of the pandemic.
And then Berlitz. Berlitz is currently in the process of discussing the positioning of its business within the Groupand how to proceed in the future. We are now in the process of discussing to reach a conclusion as soon as
possible.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
14

Next page, please.
I would like to tell you about Shinkenzemi.
The table shows the Shinkenzemi enrollment numbers in October of high school students, junior high school
students, elementary school students, and Kodomo Challenge in Japan.
The total number of enrollments in FY2021 is 2.43 million. Unfortunately, in FY2020, the number ofenrollments in October of the same period last year was 2.54 million, which means a decrease of about
110,000 people.
We had 2.35 million enrollments in FY2019, and compared with that, this is an increase of 80,000 people. I
think the main area that you are interested in is what is going on, so I would like to talk about this in moredetail on the next page.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
15

I will talk about the first half of the year and the outlook for the second half of Shinkenzemi.
In the first half of the fiscal year, each course, both new and retention, fell slightly short of the plan. For
Shinkenzemi in particular, we have been saying for a long time that we will rebuild the business from thestandpoint of retention, but that retention has been slightly lower than we had expected.
Another major reason for the decrease is that the number of new enrollments decreased by 10,000 between
May and September compared to last year.
However, as for the retention rate, we are seeing a recovery from the large retention base of 10,000 in
October. As written in the middle, the number of digital students is increasing. In the case of digital, we areable to see really quickly how our members are using the materials. By taking advantage of it, we will revise
the teaching materials. We will speed up the process of making revisions to areas that are burdensome tochildren or where they are not making progress in learning.
This is 1 of the characteristics of our choice to go digital, and it is something we need to work on. We haverevised the materials mainly for elementary school and junior high school, checking how they were being usedand how the children were progressing in their studies in the first half of the fiscal year.
In fact, such effort has been reflected in the retention rate since October. In other words, we are starting to
see utilization retention smoothly without stagnation.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
16

In October, the retention rate was up 0.2% vs. FY2020 and up 0.6% vs. FY2019, which means that the retention
rate, which was a major issue in the first half of the fiscal year, is starting to show signs of recovery in thesecond half.
And the number of new enrollments decreased slightly YoY in each business, resulting in a total decrease of
10,000 people. As for the outlook for the second half of the fiscal year, first of all, we have large target figures
as high time for new enrollment. Our target for this fiscal year is 480,000 people between October and April,
and we will be working to acquire new members.
To give you an idea of what this 480,000 number is, last year it was 420,000, for the same period. The year
before last was 560,000 people. In other words, it's somewhere in between. We are going to set goals withthat hurdle and work hard to achieve them.
Regarding retention as I mentioned earlier, given the fact that it has been recovering since October, we would
like to continue to work on getting customers to use our products thoroughly and continue to use them.

Next page, please.
The following is a brief summary of the challenges faced by Shinkenzemi in elementary school, junior highschool, and high school courses, and what we are planning to tackle in the coming years.
First is the elementary school course. Many children are still using the elementary school course, but we
recognize that there is still room for growth in the share of the upper class.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
17

Therefore, in the next fiscal year, we are planning to introduce non-grade products, mainly in the subjects ofJapanese and arithmetic, where children can excel or learn ahead of time, regardless of their grade level orprogress in the class, within the school fees.
It's been 2 years since the COVID-19 pandemic began. For the junior high school course, we have conductedvarious surveys on children's motivation to learn, but the fact is that it has not improved much. Normally,
when they enter the first year of junior high school or the first year of high school, we want them to be
motivated to go on to a new school with big aspirations and dreams. However, during the pandemic of these2 years, it has been difficult for children to get motivated.
Junior high school students, in particular, have a hard time motivating themselves to learn. This fiscal year aswell, based on proficiency score, we have digitally recognized the level of understanding of each individual
student and assign questions to them. We intend to strengthen the services that people support.
In that sense, we are thinking of mixing live online classes and digital learning centered on proficiency scoresand doing it with a lot of effort.
High school course. Today's entrance examinations are changing, and the percentage of students who go touniversity through recommendations, which is non-competitive, is increasing rapidly. For this area, thedifficulty and importance of teaching to each student's situation, this is what is happening in schools.
The high school courses will be staffed by Shinkenzemi alumni and former students at each high school fromnext fiscal year, and we are planning to introduce services that they will support each student's learning by
taking into account the characteristics of each high school they attend.
There are also a certain number of students who go to universities that are very competitive. In this area, wehave a digital teaching material called EVERES for those who have been successful in junior high school courses
and are aiming for entering a highly-selective school. Now we are planning to add this to the high school
courses as the elite EVERES course.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
18

Next page, please.
On the other hand, we have new initiatives for Shinkenzemi, although they are gradually launching.
We have a customer base where we annually distribute 500,000 units of special tablets. In such a situation, I
think it is very important to provide children with a variety of learning opportunities while using it as aplatform. We are now thinking about creating profitability as well from there.
As part of the expansion of optional courses, we started a programming course for elementary school students
this April. We were able to start with a starting enrollment of 30,000 people. We are in the black from thestart. This kind of project is happening in the Shinkenzemi.
We have a variety of optional courses, but in total, I think we can generate about JPY5 billion in sales and
JPY1.8 billion in profit this year.
That's 1 of the things. Using the tablet I mentioned earlier as a platform, we will be providing children with avariety of learning opportunities. As a way to further expand this business, we are planning to develop an
online learning business.
In fact, as you can see here, we have already conducted trials of dance and art courses this year in preparation
for the full-scale opening of the courses in April next year. We have been able to confirm that there are acertain number of people who wish to do so.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
19

In addition, we are planning to take on the new challenge of providing a variety of learning opportunities,
such as abacus, calligraphy, career, and programming courses for junior and senior high school students on
this platform in the Shinkenzemi business.

Next page, please. The following is the status of projects for schools.
In the high school business, with the new entrance examinations for high schools and the COVID-19 pandemic,
the problems of career support and learning support for students in various schools are changing. I mentioned
earlier that the problems of teachers are changing.
In that sense, career guidance is also about to change, as not only assessments centered on the Shinken
Simulated Exams, but also the provision of educational materials that connect to daily learning, or a changeof perceptions. We are now thinking about how to provide really useful career information in addition to thisassessment in the high school business.
As we do this, we will take into account the problems faced by schools and the problems faced by teachers in
the midst of the current major changes and try to make changes in the products that will provide the most
support.
Elementary and junior high school business. Since the start of GIGA project, the installation of PCs has been
completed to a large extent, and the adoption of paid educational software is about 70% complete.
In such a situation, we are dealing with this situation with a product called Mirai Seed, and there were 6,000
schools that adopted Mirai Seed this past April. The number of schools adopting that has now increased to
SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
20

7,880. By the end of this fiscal year, we are aiming to increase this number to 8,000 schools. Our initial target
was 7,000 schools, but we are now planning to add about 1,000 more schools.
Mirai Seed includes software to support active learning classes and software to support digital drills as content.
In both content and domain, Mirai Seed now has the largest market share in Japan, and that is the current
situation.

Next page, please. This is the future strategy of K&F and Kodomo Challenge.
As I mentioned earlier, this is a concrete move that will start from high time, as we will work closely with
Tamahiyo and Kodomo Challenge.
Customers who have made contact with us through the Tamahiyo app, or through various Tamahiyo products,
will be sent to Baby, the bottom line of Kodomo Challenge. We're going to strengthen these activities fromthis high time and make them more concrete. We're going to make sure to do that.
We are already bearing fruit in terms of numbers. We already have about 1,000 customers, and although wehave just started up, we would like to strengthen our efforts to make these numbers meaningful to ourcustomers and make them choose us by March.
On the other hand, Kodomo Challenge has a major role to play in continuing the business into elementary
school courses. From April of next fiscal year, digital courses will be offered in the uppermost grade of Kodomo
Challenge, which is the grade for the oldest students. We will eliminate the burden on parents by designing a

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
21

system that allows students to work alone. In addition, we will provide digital and paper materials that are
truly age-appropriate for children.
The tablet used here is the same tablet that can be used for Challenge Touch in elementary school. In thiscontext, we would like to promote solid collaboration between businesses.

Next page, please. This is about China.
In China, there have been major policy changes, and the birthrate has been declining rapidly. In this context,
I would like to explain a little about the situation and what we are thinking about.
First, on the left is the current number of members. This is a deliberate comparison with 4 years ago. Four
years ago, when the enrollments were still growing steadily all the time. Last year and this year, the growth
has stopped.
The following table shows the status in October of the previous fiscal year, April of this fiscal year, and Octoberof this fiscal year, as well as the status 4 years ago and what it was like.
As of October of the previous year, we had 1.1 million members, compared to 1.02 million 4 years ago. Four
years ago, the number of 1.02 million people increased to 1.08 million, then 1.11 million, and now it is 1.1
million, 1.12 million, and 1.03 million in October.
As for what the issues are, we are aware that various environmental changes have really taken place in thepast year to 6 months.
SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
22

Macroscopically, the first factor is the declining birthrate. In China, the birthrate is declining rapidly, and thenumber of children born has dropped by 27.6% compared to 2017. This includes the effects of the COVID-19
and various other macroscopic effects.
And then there is the competition. As I will discuss later, the competitive situation has changed considerably
due to the nationwide “double reduction” policy. If I may say so without fear of being misunderstood, for atleast the past 1 to 6 months, competitors have been ignoring profits for the time being and investing sales
expenses in order to increase the number of children and their market share.
Naturally, we did not choose to invest our sales expenses in the same way. In that sense, we were affected by
the rapid influx and investment of sales by our competitors.
And then there is China's regulation, or double reduction policy. This does not directly affect the Kodomo
Challenge business that we are running in China. I'll make that clear.
This is really the learning of subjects beyond elementary school, or even below elementary school, and theteaching of early subjects. The double reduction policy aims to put limitation on it.
We are not there to help children by scoring points in a subject. We will focus on emotional education andsupport the children's ability to live and acquire skills appropriate to their age. Since this is a business of thiskind, in that sense, it will not directly be affected from the content of the double reduction policy.
This is the future direction. In any case, in the midst of declining birthrates, competition, and the double
reduction policy, it is better to think carefully about the choice of increasing the number of members as wehave done so far, while spending sales expenses steadily.
First of all, we would like to increase the satisfaction of those who choose to use our products by focusing on
retention.
In addition, we have mainly focused on sales measures using specific places and people, such as phones andstores. Sales costs, etc., have been increasing by 5% every year in China. We need to change our sales strategy
focused on such measures. In that sense, I believe that we need to reform our cost structure.
On the other hand, when it comes to related products, we have a million members. We need to think of ways
to introduce STEAM, or art, and various kinds of learning to these 1 million members. In this way, we are
currently examining how to tackle this issue in China, which is undergoing major changes, while slightly
changing the model.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
23

Next page, please. This is the nursing care and childcare business.
As has been mentioned many times, the occupancy rate dropped to 89.8% this past September due to the
COVID-19 pandemic. This is a fact.
However, as the pandemic situation is easing, visitors are increasing compared to FY2019, and we are also
pivoting to strengthen our sales. In this sense, we are trying to recover the occupancy rate even in the COVID19 situation. We are currently working on this as our goal through the end of the fiscal year.
On the other hand, we are going to keep our medium-term strategy unchanged. We are also thinking ofincreasing the number of areas, not only in Tokyo, Osaka, and Nagoya, but also in regional areas if there areimportant places.
Also, with DX in the facility. We are also thinking of taking on new and unique initiatives, such as Benesse
Sensing Homes.
On the other hand, as for inorganic growth, we have already introduced a company called Proto Medical Care,
which is part of our group, and we are planning to grow our business in the nursing care field. In the future,
we plan to actively engage in businesses related to nursing care and childcare whenever we have theopportunity.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
24

Next page, please. This is Berlitz.
Berlitz will make a firm effort to restore the top line to profitability in the next fiscal year. In addition, we will
discuss the position of Berlitz in the group's business portfolio. This is what we announced to you at the
beginning of this fiscal year.
At present, we have made considerable progress in specific consideration in line with the above policy. In any
case, we have been discussing various specific things. I can't make a clear comment on this today, but we are
discussing various issues with the aim of reaching an early conclusion.
When we reach such a conclusion, we will inform all of you without delay, so please understand that this iswhere we are at the moment.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
25

Next page, please.
In this context, we would like to reach the target of JPY17.5 billion for the current fiscal year without changing
it, and we would also like to realize JPY26 billion for the next fiscal year through well-grounded strategies. So,
I would like to let you know that there will be no change in these figures.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
26

Next page, please.
In addition, firmly advancing DX is a major point and key strategy for all of our current businesses. Here are a
few topics to give you an idea of what is going on in Benesse DX right now.
I think I have already told you that DIP was established in April as a new organization to promote group
digitalization and was actually selected for the first time for the DX Brand 2021.
On a newer topic, the Japan e-Learning Award 2021 was awarded to Mirai Seed, or Shinkenzemi's Manabi no
Techo.
In the area of nursing care, Benesse Style Care's efforts have been selected by the Japan Agency for Medical
Research and Development as a project to promote the development of robotic nursing care equipment. As
part of this effort, we are also moving forward with the promotion of DX in nursing care.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
27

Next page, please.
In addition, as we announced today, we are planning to set up a new investment function to further accelerate
Benesse's DX activities.
In today's release, we have announced that we have established the Digital Innovation Fund with a total scaleof up to JPY5 billion over 5 years to strengthen co-creation, collaboration, and cooperation while connectingwith various initiatives and corporations outside the Company.
As a first step, we have already started working with the 2 companies shown, Code Chrysalis and Hmcomm.
I would like to continue working with these DX companies outside the Company to steadily advance Benesse's
DX.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
28

Next page, please.
As a matter of fact, since I became president in April, I have been trying to strengthen the organizational
culture to realize open management, management that is integrated with the front line, and so on. This year,
we launched a new proposal system called B-STAGE. This is an activity in which employees of the Group oreven people outside the Group can participate.
In addition to new business proposals, there is also a wide range of wisdom in the field, such as proposals forbusiness reforms and suggestions on how to make this work smoother and more efficient. We have started
to take up these voices and incorporate them into our business plans and management plans.
In the first year, we received 1,782 entries, which is a very large number of entries from the employees of theGroup companies.
In any case, I believe that the frontline is the most important part of Benesse and that it is necessary forvarious opinions from the frontline to flow through to management and be linked to major policies andstrategies. And then, we will be able to solve social issues. We want to make sure that this is done throughthis kind of system as well.
Therefore, this B-STAGE is not a one-time event. We will continue to do this every year, and we would also
like to work with the Digital Innovation Fund, which I mentioned earlier, to receive various proposals for BSTAGE.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
29This will be the last topic from me.
In terms of the future, this is the direction axis for medium- to long-term growth.
I talked about phases at the beginning. From FY2023, the Company will move into the growth phase. We will
make a solid V-shaped recovery by FY2022. After that, we will move on to the growth phase, and of course,
we have been exploring the direction and axis of this medium- to long-term growth from the current stage.
We will materialize inorganic growth of existing businesses. And we will embark on specific overseas projects.
Also, we will expand and embody a continuum of business domains where customer benefits work.
For the last item, you can think of it as firmly promoting businesses for universities and workers. I think it isnecessary for us to firmly tackle such issues to realize medium-term growth.
At the same time, I believe that we need to re-express Benesse as a company in terms of what kind of company
Benesse is and what kind of numbers it generates for society, its customers, and its economic value, while
making these 3 values link thoroughly.
As for this one, we will verbalize about Benesse as a whole and each of our businesses with this perspective.
In this context, we will create specific business actions. I think that is also very important. As a result, it willlead to ESG and sustainability.
In the second half of this fiscal year, I would like to discuss these issues with each company in the course of
our business planning.
SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
30And this is a matter of course, but we will manage our business with an awareness of capital efficiency. We
would like to firmly increase efficiency, centered on ROE. COVID-19 has also contributed to the damage to theGroup's ROE, so we will quantify this as a KPI, and at the same time, we will actively adopt the portfolio
approach and manage with an awareness of capital efficiency.
The reason why I am telling you this is that this second half of the fiscal year will be the time for each company
or the entire company to think about our business plans in depth once more for the next fiscal year, withthese 3 areas in mind. We will continue to develop these business plans, and we would like to convey thedetails to you in the next financial results briefing. That's why I told you this again at the end.
That's all from me. Thank you very much.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
31

______________

Disclaimer
SCRIPTS Asia reserves the right to edit or modify, at its sole discretion and at any time, the contents of thisdocument and any related materials, and in such case SCRIPTS Asia shall have no obligation to provide
notification of such edits or modifications to any party. This event transcript is based on sources SCRIPTS Asia
believes to be reliable, but the accuracy of this transcript is not guaranteed by us and this transcript does not
purport to be a complete or error-free statement or summary of the available data. Accordingly, SCRIPTS Asia
does not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of theinformation contained in this event transcript. This event transcript is published solely for information
purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an
offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.
In the public meetings and conference calls upon which SCRIPTS Asia’s event transcripts are based, companies
may make projections or other forward-looking statements regarding a variety of matters. Such forwardlooking statements are based upon current expectations and involve risks and uncertainties. Actual results
may differ materially from those stated in any forward-looking statement based on a number of importantfactors and risks, which are more specifically identified in the applicable company’s most recent public
securities filings. Although the companies may indicate and believe that the assumptions underlying theforward-looking statements are accurate and reasonable, any of the assumptions could prove inaccurate orincorrect and, therefore, there can be no assurance that the anticipated outcome described in any forwardlooking statements will be realized.
THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE
PUBLIC MEETING OR CONFERENCE CALL. ALTHOUGH SCRIPTS ASIA ENDEAVORS TO PROVIDE ACCURATE
TRANSCRIPTIONS, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE
TRANSCRIPTIONS. IN NO WAY DOES SCRIPTS ASIA OR THE APPLICABLE COMPANY ASSUME ANYRESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BY ANY PARTY BASED UPON ANY EVENT
TRANSCRIPT OR OTHER CONTENT PROVIDED BY SCRIPTS ASIA. USERS ARE ADVISED TO REVIEW THE
APPLICABLE COMPANY'S PUBLIC SECURITIES FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER
DECISIONS. THIS EVENT TRANSCRIPT IS PROVIDED ON AN "AS IS" BASIS. SCRIPTS ASIA DISCLAIMS ANY AND
ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWAREERRORS OR DEFECTS, AND ACCURACY, COMPLETENESS, AND NON-INFRINGEMENT.
None of SCRIPTS Asia’s content (including event transcript content) or any part thereof may be modified,
reproduced or distributed in any form by any means, or stored in a database or retrieval system, without theprior written permission of SCRIPTS Asia. SCRIPTS Asia’s content may not be used for any unlawful or
unauthorized purposes.
The content of this document may be edited or revised by SCRIPTS Asia at any time without notice.
Copyright © 2021 SCRIPTS Asia Inc. (“SCRIPTS Asia”), except where explicitly indicated otherwise. All rights
reserved.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
32