www.nichiigakkan.co.jp

NICHII GAKKAN COMPANY

Financial Results Briefing Document
for the 1H of the FY 2014
November 8, 2013

Todays Contents

1.Overview of Financial Results for the 1H of the FY2014（ 1 ） Financial Results for the 1H of the FY 2014（ 2 ） Consolidated Net Sales and Operating Income by Business（ 3 ） Increase/Decreases in Net Sales（ 4 ） Increase/Decreases in Operating Income（ 5 ） Increase/Decreases in Operating Income to forecast（ 6 ） Segments Highlights（ 7 ） Education Business Highlights by Brand（ 8 ） Status of Child Care Business・・・・・Ｐ3〜8・・・・・Ｐ9・・・・・Ｐ10・・・・・Ｐ11・・・・・Ｐ12・・・・・Ｐ14〜17・・・・・Ｐ18・・・・・Ｐ19

２. FY2014 Earnings Forecasts（ 1 ） FY2014 Earnings Forecasts
・・・・・Ｐ21（ 2 ） FY2013 Financial Results Forecast by Business・・・・・Ｐ22（ 3 ） Factors of Revisions to FY2014 Financial Results Forecast by ・・・・・Ｐ23
Business （Sales）（ 4 ） Factors of Revisions to FY2014 Financial Results Forecast by ・・・・・Ｐ24
Business （ Operating Income）（ 5 ） Returns to Shareholders
・・・・・Ｐ25（ 6 ） Challenges for the future
・・・・・Ｐ26
Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document1

Overview of Financial Results
for the 1H of the FY 2014

Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document

2

Financial Results for the 1H of the FY 2014

（Unit：million yen）

FY2014 2Q

FY2013 1Q

Net Sales
Operating Income%Ordinary Income%Net Income%Copyright © 2013Nichii Gakkan Company. All rights reserved.

ResultForecastResult132,132

137,400 136,049

Year on Year

3.0%

3,903

3,600

3,229

▲17.3%

3.0%2.6%

2.4%

-

3,491

3,200

2,502

▲28.3%

2.6%

2.3%

1.8%

-

1,432

2,100

1,660

15.9%

1.1%

1.5%

1.2%

-1H FY2014 Financial Results Briefing Document

3Financial Results Highlights for the 1H of the FY2014
POINT1 The 6th consecutive year of revenue growth with record-breaking net sales

・Long-term-careContinued to steadily increase, both for homecare services and services at health care facilities.

・Medical Support

Acquisition new contracts with large hospitals

POINT2Contribution from operating results of Nichii Care Palace and GABANet sales

Operating income

Nichii Care Palace

9,057million（Increase 5.8％ year on year） 799millon（Increase 90.4％ year on year）

GABA

5,050million（Increase 8.6％ year on year） 752million（Increase 40.1％ year on year）* Operating income figures indicate post-goodwill figures.

POINT3

Continuous implementation of strategic investment

・ Active offering of COCO Juku Junior（Franchise）
・Active offering of Child care centers
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1H FY2014 Financial Results Briefing Document

4

Progress of strategic investment

POINT3

Continuous implementation of strategic investment

11.3

11.9

12.3

Entering the language
education market

Languageeducation

12.9

13.3

nationwide development

13.9

Establishing integrated→language education
programs●The launch of COCO
●The launch of COCO jyuku
jyuku Junior school
schools, nationwide.
Established COCO jyuku
Made SELC a subsidiary ●contact for support ●for studying abroad● Made GABA asubsidiary●Established York NYU-SCPS-ALI ●Global Study
Tokyo Open●
CenterChildCare

Build organizationalstructures●Establisheda Child Care business division

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Active expansion of child care centerstaking advantage of the synergies●Offering English Conversation lessonsconversation●Providing high-value-added services
by taking advantage of the synergies
1H FY2014 Financial Results Briefing Document

5

Nichii language line up
For Adults

For Children

One‐on‐OneGroup lesson

Group lesson

Lesson〜nationwide development〜
80 Class room〜nationwide development〜
113 Class room

〜Metropolis development〜
38 Class room

(Course)Ordinary Conversation
Business English
Medical course(Course)
International Course(Course)
Business English

Regular Course
Business alliance withSupport forNew York Univ.

studying abroad

Collegeat Sydney and Vancouver

ordinary conversationetc

ALI Tokyo operating
at Shinagawa

COCO jyuku contact for support
for studying abroad（Principal businesses）(Course)Business English
English for Health Fitness
and Wellbeing
Copyright © 2013Nichii Gakkan Company. All rights reserved.

(Program)
Professional English Program
Comprehensive English Program
College Preparatiory Program

Proposing plan tostudying abroad
Consultation for studying abroad
Carrier Support
1H FY2014 Financial Results Briefing Document

6

Financial Results Highlights for the 1H of the FY2014【Goals of Government Action Plan】 Ｔraining for global human resources
By 2020, double the number of Japanese students who study abroad(university students, etc.: 60,000 people→120,000 people)

Further expansion of a global networkand community-based development
Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document

7

Financial Results Highlights for the 1H of the FY2014【Goals of Government Action Plan】
Aim for the elimination of childcare waiting lists
by securing childcare arrangements
for additional about 400,000 children by 2017

Active expansion of child care centers,
establishment of a new childcare system (Launchslated for 2015) in mind
And high-value-added services through Utilizing
Synergies with Nichii s Core Businesses

Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document8

Consolidated Net Sales and Operating Income by Segment（Unit：million yen）

Net sales

FY2013 2Q

FY２０１４ 2Q

Year on Year

（Result）％

Medical Support

51,86952,770

1.7%

Long-term Care

68,112

71,456

4.9%

1,962

1,776

▲9.5%

+Health Care

70,07573,232

4.5%

Education

10,152

9,873

▲2.8%

863651▲24.6%▲829▲478-

132,132

136,049

3.0%

Health Care
Long-term Care

Other
Eliminations/Corporate
Total（Unit：million yen）

Operating income

FY2013 2QYear on Year

FY2014 2Q％

Medical Support

4,100

3,900

▲4.9%

Long-term Care

5,314

6,555

23.4%

27349

▲82.0%

5,587

6,604

18.2%

▲1,978▲3,208-26▲30-▲3,831▲4,036-

3,903

3,229

▲17.3%

Health Care
Long-term Care
+Health Care
Education
Other
Eliminations/Corporate
Total
Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document

9Increases/Decreases in Net Sales (Year on Year)

Increase in sales of
3,917 million yen

An increase in sales, owing to contribution
at long term care and medical support（unit: million yen）

＋351

＋3,157・Hospital ＋1,100 mn
・Clinic−−279

200 mn＋900

136,049−212

・Existing business −1,100 mn
・Language＋ 800 mn

132,132
・Home care
+1,500 mn
・Facility care +1,600 mn
・Child care+ 250 mn
・Health care − 200 mn

13.3
2Q

Medicalsupport

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Long-term care Education
Health care

OtherEliminations/Corporate

14.3
2Q

1H FY2014 Financial Results Briefing Document

10

Increases/Decreases in Operating income (Year on Year)
Long term care are contribute.
Declined from a year ago, mainly due to strategic
investments of language education, and the impact of thechangeover from Home Helper Course to a Basic Training
Course for Care Workers
・Home care＋400 mn
・Facility care ＋850 mn
・Child care
0 mn・Health care −250 mn

Decrease in profit of674 million yen＋1,017（unit: million yen）

3,903
−200

−1,2293,229−56−204

OtherEliminations/
Corporate・Existing business − 50 mn・Language−1.100 mn

13.3
2QMedicalsupport

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Long-term care Education
Health care

14.3
2Q

1H FY2014 Financial Results Briefing Document

11

Increases/Decreases in Operating income (to forecast)

Major Factors for Changes to 1H Operating income forecast
・Medical support
・Long-term care and Health careHome care−200＋1.200＋750

Facility care＋500

Child care

−50・Education−1,300

COCO juku−950

Existing Course−450

GABA＋100・Other−50・Eliminations/ Corporate

−50

Total
Copyright © 2013Nichii Gakkan Company. All rights reserved.

（unit: million yen）

・Long term careThanks to the increase in the number of users
both home care and facilities, operational
efficiency at facilities improved

・Education
Delay in COCO juku and existing course
plan to student,−400
1H FY2014 Financial Results Briefing Document

12

Segments Highlights
for the 1H of the FY2014

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1H FY2014 Financial Results Briefing Document

13

Segment Highlights for the 1H of the FY2014 (Medical Support)Consolidated net sales and operating income(year-on-year change)

Net sales：¥52,770million（＋1.7％）

Operating income：¥3,900million（▲4.9％）
52,77051,869POINT
Solid performance in the hospital businessowing to the focus on the acquisitionof new contracts and the expansionof the scope of work(＋1.7％)

Growth rate for net salesof the hospital business
4,100

3,9002.4％＋(-4.9％)Net sales

Operating income

Net sales related to hospitals and number ofcontracts (year-on-year change)
46,84945,757

・The growth rate of net sales isincreasing, driven by the performanceof the hospital business.
・Earnings fell due to temporary
preliminary expenses associatedwith the launch of services at newly
acquired hospitals.

TOPICS▶Expanding management support services
・ Developed medical concierge service(＋2.4％)

1,978

1,917
(-3.1％)

・

Simultaneous started training courses
for medical concierge (education segment）

Started a clinic business in Singapore withthe opening of the Nichii International Clinic▶

Net sales

Number of contracts(as of the end of September)

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Acquiring knowledge in・ medical service management
and international medical service cooperation.
1H FY2014 Financial Results Briefing Document

14

Segment Highlights for the 1H of the FY2014 (Long-term Care and Health Care)
Consolidated net sales and operating income(year-on-year change)
Long-term Care + Health CareNet sales：¥73,232million（＋4.5％）

Operating income：¥ 6,604million（＋18.2％）
73,23270,075(＋4.5％)

6,604（＋18.2％)

5,587

Net sales

Operating income

Number of users of home care and facility
care services (year-on–year change)* As of September 30, 2013

142,654
139,649 (＋2.2％)

10,1499,643Home care services(+5.2％)

Facility care services

Copyright © 2013Nichii Gakkan Company. All rights reserved.

POINT

Record-breaking profit owing toan increase in the number of users
and higher facility efficiency
・Developing comprehensive
Operating margin / services

9.0％

・Pursued efficient facility

Long-term careand health care・Earnings contribution from/ Nichii care palace

TOPICS▶Developed services tailored to local needs
・Over 1,000 home-visit care service offices* 1006 home-visit care service offices as of September 30, 2013

・Expanded home nursing care・and dementia care.
Developed and offered private brand products▶ and promoted sales of general housekeeping
services, etc▶ Preparation for full-fledged businessdevelopment in China

1H FY2014 Financial Results Briefing Document

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Segment Highlights for the 1H of the FY2014 (Long-term Care)

Establishment of facilities

End of September
2012

End of September
2013

End of March2014

Care plan

749

788(＋39)788＋αHome-visit care

977

1,006(＋29)

1,052

Day care337

360 (＋23)

383

Home nursing care47

65(＋18)100

Hohoemi243

253(＋10)262

Kirameki4951(＋2)

58

Nichii Home

5052(＋2)

55

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1H FY2014 Financial Results Briefing Document

16

Segment Highlights for the 1H of the FY2014 (Education)
Consolidated net sales and operating income(year-on-year change)
Net sales：¥9,873million（▲2.8％）

Operating income：-¥3,208million（−）
10,152

9,873

POINT
Continued long-term strategic investmentin the language business
Reviewed qualifications for nursing care workers
COCO Juku juniorclassrooms(-2.8％)

・ Developing COCO juku junior・ Thorough quality control

Strengthen corporate marketing
113 in Japan ・ Steadyincrease in students ofNet sales-1,978-3,208

・Franchise・With existing/schools・GABA

Lower assumptions for training
・ courses for entry-level nursing
care qualifications

Operating income

Net sales by business (year-on-year change)

5,455
4,698

(＋16.1％)

Language course

5,261

4,181(-20.5％)

Existing course(COCO Juku + GABA)
Copyright © 2013Nichii Gakkan Company. All rights reserved.

TOPICS▶ Launched the new COCO Juku junior brand
New York University School of Continuing and▶ Professional Studies American Language Institute(ALI) Tokyo Center opened on September 26
Offering of courses in accordance with the review
qualification system▶ of the health care workers

1H FY2014 Financial Results Briefing Document

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Segment Highlights by Education Brand for the 1H of the FY2014

FY2013 2Q

FY2014 2Q

Year onYear

5,261

4,181

-20.5％

(478)

(540)

−

48404

−

Operating income(2,153)(3,465)−Net sales

4,650

5,050

8.6％

53775240.1%

Net sales

Nichii(existing brands） Operating income
Net sales

ＣＯＣＯJuku

ＧＡＢＡ*1

Operating income* 1: Operating income figures indicate post-goodwill figures

Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document18

Child care business for the 1H of the FY2014
Consolidated net sales and operating income(year-on-year change)
Net sales：¥775million（＋65.9％）

Operating income：-¥270million（−）

POINT
Expanding the size and scope of operations throughthe proactive development of the child care business
Promotion of high-value-added services
Active offering of child care services
Increase of 23 centers year on year

775(＋65.9％)467
Managed child careservices

Net sales
-260

-270

77centers
in total

Operation income

Net sales by business (year-on-year change)
644(＋73.5％)

131(+36.6％)

371

96

- Certified child care centers:

3- Directly managed child care centers: 1- In-hospital and in-office child carecenters:

5- Child care support, etc.:

6- Dispatch of child care specialists:

8TOPICS

High-value-added services throughcollaboration with our business▶

・Offering English conversation lessons
Holding forums to allow communication ・・
among nursing home residents

・In-hospital child care

In-office child care

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1H FY2014 Financial Results Briefing Document

19

Earnings Forecasts

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1H FY2014 Financial Results Briefing Document20

FY2014 Financial Results Forecast（Unit：million yen）

FY2013
FY2014FY2014

Amount Changechange(%)（Initial Forecast）（Revised Forecast）(to initical forecast)(to initial forecast)

267,191

277,600

273,200▲4,400

▲1.6%

8,741

9,000

6,600

▲2,400▲26.7%

3.3%

3.2%

2.4%

--

8,326

8,000

5,000

▲3,000▲37.5%

3.1%

2.9%

1.8%

--

4,383

4,500

2,800

▲1,700▲37.8%

1.6%

1.6%

1.0%

--FY2013
Net salesOperating income%Ordinary income%Net income

FY2014%

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1H FY2014 Financial Results Briefing Document21

FY2014 Financial Results Forecast（Unit：million yen）

Net Sales

FY2013

FY2014FY2014

Resultinitial forecast

Revised forecast

Medical Support

104,110

104,900

105,800

Long-term Care

137,586

143,500

144,200

Health Care

3,725

5,500

3,800

Long-term Care
+ Health Care

141,311

149,000

148,000

Education

21,72723,30019,200

1,684

1,600

1,300

▲1,642▲1,200▲1,100267,191

277,600

273,200

OtherEliminations/ CorporateTotal

Operating

FY2013

FY2014FY2014incomeResult

initial forecast

Revised forecast

Medical Support

8,301

8,500

7,900

Long-term Care

10,89011,30013,4002922000＋Health Care

11,183

11,50013,400

Education▲3,338▲3,300▲6,900128

100100▲7,534▲7,800▲7,900

8,741

9,000

6,600

Health CareLong term Care

Other
Eliminations/ Corporate

Total
Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document

22

Factors of Revisions to FY2014 Financial Results Forecast (Net Sales)
・Medical support Business（unit: million yen）＋900

Hospital＋800

Clinicetc.

＋100・Long-term care and□Health care Business−1, 000

Home care＋300

Facility care

＋200

Child care

＋200

Health care

−1,700・Education Business−4,100

COCO Juku−1,050Existing−3.050±0−300Other
・Other Business・Eliminations/ Corporate
Total

Copyright © 2013Nichii Gakkan Company. All rights reserved.

＋100−4,400・Medical support
Expect to an increase in sales.
Acquisition of new contracts at large hospitals

・Long-term care
Steady increases in users of home-care andfacility-care services

・Health care
A slower-than-planned pace of home helperdispatching

・Education
Lower assumptions for training courses forstudent numbers at coco juku and training
courses for entry-level nursing carequalifications

1H FY2014 Financial Results Briefing Document

23

Factors of Revisions to FY2014 Financial Results Forecast (Operating Income)（unit: million yen）

・ Medical support Business・ Long-term care and□Health care Business−600＋1,900・Long-term careHome care＋1,600

Facility care＋600

Higher facility usage rate by the increase in thenumber of home care and facility care service users

Child care

−100

Health care

−200

・Education Business−3,600

COCO Juku−2,150Existing−1,550

Other＋100

・ Other Business・ Eliminations/ CorporateTotal

Copyright © 2013Nichii Gakkan Company. All rights reserved.

±0・Education
Continuous implementation of strategic investment
to COCO juku junior.
A slower-than-planned pace of enrollments ofCOCO juku and existing courses.

−100−2,4001H FY2014 Financial Results Briefing Document24

Distribution of Profits
Returns

Stable and continuous returns is our basic principle

In anticipation of record profit going forward, dividend increasefor 5 consecutive years
Forecast for FY2014 : ¥20/share (¥10 interim, ¥10 year-end)
(Yen)

2420

20.0

Dividend has 2.3 times in decade
１６.０

1612１１.０

１１.０

１２.０

FY2006

FY2008FY20108.8840FY2004FY2012FY2014(Forecast)

Note: The Company executed a 2-for-1 common stock split on April 1, 2009, and the figures were retroactively adjusted accordingly.

Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document25

Challenges for the future

Early achieving stable earnings growth over the long termby leverage of strategic investmentTarget management indicators
Double-digit year-on-yearsales growth
an operating margin of
7% or more
an ROE of 15% or more

Copyright © 2013Nichii Gakkan Company. All rights reserved.

1H FY2014 Financial Results Briefing Document26

All the profit targets and other forecasts, including the number of contracts,
number of users, and goals contained in this document, are based on thecurrent information available to the Nichii Group. Such information issubject to the influence of factors such as economic circumstances,
relaxation of regulations and employment conditions. Please understandthat actual business performance and other achievements, such as thenumber of contracts and number of users, may be substantially different
from the forecasts.

<<Contact information>>
Nichii Gakkan Company
Corporate Planning Headquarters
IR Department
Address: 2-9 Kanda Surugadai,,Chiyoda-ku, Tokyo
Tel: 03-3291-5637 (IR)
Mail: nichii-ir@nichiigakkan.co.jp