H1 FY Ending February 2021 (FY 2/21)
Earnings Briefing Materials
October 9, 2020

Tokyo Individualized Educational Institute, Inc.
(TSE 1st Section, Securities Code 4745)

◆Q2 FY 2/21 ResultsImpact of COVID-19 pandemic■Schools closed 66 days during Q1 (Mar 2-13 and Apr 8–May 31)
Fees not collected in May, offered substitute lessons for closed period■Gradual reopening after state of emergency was lifted
Aichi, Fukuoka from May 21; Kansai from May 22; Metro Tokyo from Jun 1■Thorough infection prevention measures upon reopening[From May]

[Other]Masks/faceshields
requiredDeskscleanedafter everyclassHand
sanitizer
gel
provided

Ventilationin allclassrooms

Layouts arranged tomaintain social distancing⚫ Health control measures, e.g. pre-work temperature check⚫ Rigorous enforcement of hand washing2

FY 2/21

H1 results (YoY)(Millions of yen)

H1 FY 2/20

(non-consolidated)

H1 FY 2/21

Change(consolidated)

YoY

Net sales

9,820

8,186

-1,633

83.4%

Cost of sales

6,339

6,225

-113

98.2%

64.6%

76.0%

ーー

3,480

1,960

-1,520

56.3%

35.4%

24.0%

ーー2,894

2,787-107

96.3%

29.5%

34.1%

ーー

Operating income (loss)

586-826-1,412ーOperating income margin

6.0%ーーー

Ordinary income (loss)

588-796-1,384ー

Ordinary income margin

6.0%ーーー

Net income (loss)

355-712-1,067

ー

Net income margin

3.6%ーーーー-711ーーーーーー

Cost of sales ratio
Gross profit
Gross profit margin
SG&A
SG&A ratio

Net loss attributable to parentcompany

Net income margin* The amount and percentage of change from 1H FY 2/20 and 1H FY 2/21 are provided for reference.

3

Enrolled Students

Significant impact from Q1 school closure
H1 average enrollment (by student category)
30,541
26,940

YoY89.0%

31,88828,49528,383(55.0%)High SchoolMiddle School(33.6%)

Elementary(11.4%)
FY 2/17

FY 2/18

FY 2/19

FY 2/20

FY 2/21(Students)

YoY by student category: high school 91.5%; middle school 84.9%; elementary school 90.2%* Students enrolled in individualized teaching4Response During Closure and After Reopening

Meticulous individual care
Care duringclosureHome studysupport✓ News of schoolsuspension
communicated directlyfrom classroom to eachstudent✓ Regular communications
maintained during
closure, offering
consultation regarding
studies and home study
difficulties✓ AI-based home study
support was provided
to middle and highschool students, while
printed materials weredistributed online toelementary school
students, all free ofcharge.

Special classes✓ Personalized programs
were offered tostudents incorporating
shortened summer
breaks and reschedulingof term-end tests dueto the school
suspension.

5Online Individualized Teaching

Individualized interactive lessons
with teacher✓ Launched in June 1, 2020
✓ Online individualized classes for up to two students as inphysical lessons✓ Class system, designated teacher system and tuition fees
same as physical classes✓ Can be combined with physical classes (hybrid system)6

Withdrawal Rate

Lowest rate in five years
2018年
2019年
2020年
201820192020【6月ー8月退会率推移(2018年-2020年)】
9.00%

Withdrawal
rate

8.00%

10.83%

11.00%
7.00%(2020)

6.00%

5.21%

5.00%
5.00%
4.00%

3.00%

2.56%

2.00%

2.97%

2.72%

Mar: 10.83%
Apr: 5.21%
May: 1.72%
Jun: 2.56%
Jul:2.97%
Aug: 2.72%

1.72%

1.00%
0.00%
0.00%

Mar
3月

Apr
4月

May
5月

Jun
6月

Jul
7月

Aug
8月

7Number of New Students

Recovery from Q1
Quarterly number of new students (YoY)
FY 2/20

17,986
Q1 growth■■ Q1

Q2 growth

36.0%

95.8%

■ Q2

12,408FY 2/21H1 number of new students (YoY)
FY 2/20

FY 2/21YoY

YoY (%)

Mar

3,863

2,331

-1,532

60.3%

Apr

2,887

401-2,486

13.9%

May

1,310

167

-1,143

12.7%

Jun

2,445

2,818

373

115.3%

Jul

6,120

3,734-2,386

61.0%

Aug1,361

2,957

1,596

217.3%

8

Enrolled Students: Growth

Record net growth in Q2
Net growth QoQ in enrolled students at end-Q2

Net growth QoQ inenrolled students
at end-Q2

108.2%YoY

FY 2/18

FY 2/19

FY 2/20

FY 2/219

Record Net Enrollment Growth

Steep improvement in enrolled student
growthNumber of enrolled students and growth YoY (2020)2019

End of Feb

2020

End of May

YoY

End of Aug
10

Opening Dominant Schools

Five openings lift total network to 261
schools
New school openings
FY 2/21

5NewSchools

Newly Opened Schools
Tsurukawa School (Tokyo)
March 2020

Schools at
Year Start

Funabashi North Exit School(Chiba Pref.)March 2020

FY 2/19
Results

FY 2/20
Results

H1 FY
2/21
Results

Schools at
Year Start

240

248

256

NewSchools

885

Schools at
Year End248

256

261

Kyobashi School (Osaka Pref.)May 2020

Machida Terminal Exit School(Tokyo)
June 2020

Nagareyama Otakanomori School(Chiba Pref.)June 202011

Teachers Numbers

Teacher levels remain stable
Teachers and enrolled students (end of Aug)* Including part-time office staff

16,00038,00036,51235,36814,00033,07536,00011,18512,00032,907
11,686

10,422

30,95832,0009,277

10,00034,000Teachers

30,0008,184

Enrolled

28,000 students

8,000

26,0006,000

24,0004,000
22,0002,000

20,0000

18,000

17.2期
FY
2/17

18.2期
FY
2/18

FY19.2期
2/19

20.2期
FY
2/20

21.2期
FY
2/21(People)

12

◆FY 2/21 Results Forecast

FY 2/21 Full-Year Results Forecast

Aiming for full-year profit(Millions of yen)

FY 2/20(consolidated)
Results

FY 2/21(consolidated)
Forecast

ChangeRate ofchange

21,261

18,700-2,561

88.0%

Operating income

2,889

260-2,629

9.0%

Operating incomemargin

13.6%

1.4%

Ordinary income

2,892290-2,602

10.0%

Net income
attributable to parentcompany

1,8023-1,799

0.2%

Net income margin

8.5%

0.0%

EPS (Yen)

34.94

0.07

-34.870.0%

Net sales

Assumption: COVID-19 impact
No further school shutdown or class suspension from state of emergency
14

FY 2/21 Full-Year Results Forecast

Growth analysis(Millions of yen)
2,900

1,400

900

4000

(non-consolidated)

FY 2/20

Sales-related profit
declineRise in teacher salaries

Employee personnelexpenses

Rent(e.g. licensing, networkmaintenance)

Online lessons

Copier and PC leasing(revision in Courses ofStudy (governmentguidelines for teaching))

Research materials

Goodwill

COVID-19 prevention
and equipment

OtherAd spending

Part-time office staff
salaries

Reduction in grouptraining

Lower travel/meeting
expenses

Other cost reduction

FY 2/21 (consolidated)15

FY 2/21 Dividend Forecast

Maintaining stable dividends
Dividend payout results & forecast
FY 2/17

FY 2/18

FY 2/19

FY 2/20

FY 2/21Forecast

Full-year
dividend

26 yen26 yen26 yen26 yen26 yenDividend
payout ratio98.1%

80.9%

73.1%

74.4%

―Mid-year
dividend

13 yen13 yen13 yen13 yen*13 yenEnd-of-year
dividend

13 yen13 yen13 yen13 yen*13 yen*Announced on October 9, 2020

Shareholder benefits program
The program remains intact. Shareholders are entitled to select one gift from those listed
in the shareholder benefits catalogue (e.g. food, pre-paid card for purchasing books,
donation to social contribution activity).
16

◆Appendix

FY 2/21

Balance sheet/cash flow statement(Millions of yen)Feb. 29, 2020
(consolidated)

Current assetsFixed assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Total net assets
Total liabilities and net assets

9,790
3,399
13,190
3,577
6
3,584
9,606
13,190Feb. 28, 2021
(consolidated)

7,347
3,990
11,337
3,145
4
3,149
8,188
11,337

Change-2,443
590-1,852-432-1-434-1,418-1,852(Millions of yen)

H1 FY 2/21
(consolidated)

Operating cash flow
Investment cash flow

Financing cash flow
Increase (decrease) in cash & cash equivalents
Cash & cash equivalents at beginning of year

Cash & cash equivalents at end of period-2,264-538-705-3,5088,753
5,244

18