www.nichiigakkan.co.jp

NICHIIGAKKAN CO., LTD.

Financial Results Briefing Document
for the 3Q of the Fiscal Year Ending March 31, 2020

February 7, 2020

Gratitude for Participation in Memorial Service
We respectfully announce that the memorial service for Akihiko Terada, ourformer Chairman and CEO, was held at Palace Hotel Tokyo on Thursday,
December 12, 2019.
We would like to express our sincere gratitude for your participation. We also
wish to thank you sincerely for the kindness you showed to the deceased
while he was alive and hereby express our deep appreciation.
NICHIIGAKKAN CO., LTD.
Nobusuke Mori, President all employee© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 1

Overview of Financial Results© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 2

Overview of Financial Results（unit:million）

FY2020.3

FY2019.3
3Q

Net Sales
Operating Income%Ordunary Income%

Profit attributable toowners of parents%

3Q

Difference

Change215,723

223,471+7,748

3.6%

7,336

9,444

+2,107

28.7%

3.4%

4.2%

--

4,043

6,083

+2,039

50.4%

1.9%

2.7%

--

2,107

3,378

+1,271

60.3%

1.0%

1.5%--© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 3

Financial Results Highlights
Net sales maintained steady growth (up 3.6% year on year).
・Core businesses (Medical Support, Long Term Care, and Childcare) led the growth of net sales.
→Medical support+6.0％、Long-term care+1.3％、Child care+22.5％

Structural reforms contributed to an increase in revenue.
・ Improvement through structural reforms of the Education and Global Segments (up 3,139 million yen)
→ 80.4% progress in the estimated improvement through structural reforms (3,906 million yen)

Investment in growth strategies for sustainable growth・ Human resource investment→ Improve employee treatment and promote the acceptance of foreign housekeeping service providers
・ Growth investment→Split 380 home-visit care service offices into 1,383 offices across Japan© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 4

Overviews by Business Segment(Consolidated Net Sales)（Unit:million yen)

Net Sales

FY2019.3

FY2020.3

3Q

3Q

AmountDifference

Amount(yoy)ChangeMedical Support

80,73385,597+4,863

6.0%

Long-term Care

114,167

115,608+1,441

1.3%Child Care

8,739

10,709+1,970

22.5%

Health Care

1,228

1,299+715.8%

Education

8,914

8,328

▲586

▲ 6.6%

Therapy

438568+129

29.6%

Global

1,496

1,283

▲213

▲ 14.2%Others

1,051622▲428▲ 40.8%▲1,045▲ 545+499-215,723

223,471+7,748

3.6%

Eliminations
Total© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 5

Overviews by Business Segment(Consolidated Operating Income)（Unit:million yen)

Operating Income

FY2019.3

FY2020.3

3Q

3Q

AmountDifferenceAmount(yoy)

ChangeMedical Support

6,6937,190+497

7.4%

Long-term Care

12,47412,183▲290▲ 2.3%

Child Care▲ 229▲ 393▲163-

Health Care▲ 707▲ 1,488▲780-

Education▲ 2,761▲ 323+2,438-

Therapy▲ 276▲ 121+154-

Global▲ 1,107▲ 406+701-

Others173151▲22▲ 12.7%▲ 6,920▲ 7,348

▲427-

7,336

9,444+2,107

28.7%

Eliminations
Total© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 6

Overviews by Business Segment(Consolidated Ordinary Income)(Unit:million yen)

Ordinary Income

FY2019.3

FY2020.33Q3QAmountDifference

Amount(yoy)ChangeMedical Support

6,795

7,304+508

7.5%

Long-term Care

9,114

8,747▲366▲ 4.0%

Child Care▲ 392▲ 549▲157-

Health Care

▲ 707

▲ 1,488▲780-

Education▲ 2,789▲ 257+2,531-

Therapy▲ 277▲ 121+156-

Global▲ 1,145▲ 496+649-

Others189

163▲25▲ 13.6%▲ 6,742▲ 7,219

▲476-

4,043

6,083+2,039

50.4%

Eliminations
Total© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 7

Summary of Balance Sheet (Consolidated)(Unit : million yen)

End of March 2019 End of December 2019 Difference
Current assets

65,684

68,340+2,655

Fixed assets

127,955

125,648▲2,307

193,640

193,989+348

Current liabilities

60,66462,792+2,128Non-current liabilities

91,89888,961▲2,937

Total liabilities

152,562

151,754▲808

Total net assets

41,07742,234+1,157

193,640

193,989+348

Total assets

Total liabilities and net assets© 2020 NICHIIGAKKAN CO., LTD. All rights reserved.

8

Summary of Cash Flows (Consolidated)(Unit : million yen)
FY2016.3

FY2017.3

FY2018.3

FY2019.3FY2020.33Q

3Q

3Q

3Q

3Q

Cash flows from Operating activities

4,441

7,448

11,441

6,788

7,257

Cash flows from Investing activities▲ 3,545▲ 1,958▲ 166▲ 398▲ 1,153896

5,490

11,275

6,390

6,104

1,282

▲ 6,928▲ 10,586▲ 5,438▲ 6,738

14,806

13,003

16,958

19,115

17,416

Free cash flow

Cash flows from Financial activities

Cash and cash equivalents at end of year

© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 9

Segment Overview© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 1

(Core Business) Medical Support
Promotion of rationalization of contracts
by improving workplace management
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales━Operating Income

Net Sales
85,597million yen (yoy +4,863 million yen)
Operating Income 7,190million yen (yoy +497 million yen)

（Unit：million yen）

28,467
26,794

26,877

27,062

28,37528,75527,040・The further rationalization of contracts led to an increase inproductivity and net sales per hospital, which resulted in net
sales and income growth.
・Large new orders were acquired during the fiscal year byimproving sales capabilities.
・Improvements in employee treatment were implementedin October 2019.
・The number of students in the medical administration course
increased steadily.
(Number of students: 10,773, up 8.5% year on year)

2,590

2,553
2,329
2,119

2019.3
1Q

2Q

2,359

2,245

3Q

4Q

2020.3
1Q

2,241

2Q

3Q

© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 11

(Core Business) Long-Term Care
Area networks expanded through reorganization of offices
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales

Net Sales115,608million yen (yoy +1,441 million yen)

Operating Income 12,183million yen (yoy ▲290 million yen)

37,448

・Net sales grew thanks to an increase in the operating rate ofresidential care facilities, but income decreased due to priorinvestment in the reorganization.

38,0784,370━Operating Income （Unit：million yen）
38,641
37,277

4,455

4,191

・One new Hohoemi office and one new Nichii Home office wereestablished during the quarter under review.
・Split 380 home-visit care service offices. Worked to improve
the operation system of the offices and focused on raising
service quality.
・The number of students increased through the promotion oftraining for new members of long-term care service stuff.
(Number of students: 7,069, up 16.0% year on year)

38,05938,50839,041

4,327

3,909
3,665

3,649

2019.3
1Q

2Q

3Q

4Q

2020.3
1Q

2Q

3Q© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 12

(Reference) Aiming for Acceleration of Further Growth Based onHome-visit Care Service

Levers to accelerate growth
Area cover

Sales percustomer

Employeehome-visit
care bases

Home-visit careunit priceNumber of staff+380bases+¥2,270 ※+219people※

Quality ofservice※

A customer satisfaction
survey (FY2019）

95.1％

Number of Service users* Comparison with the status before starting to split home-visit care service offices (June 30, 2019)© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 13

(Core Business) Child Care
The quarterly operating result turned a profit thanks toan increase in the operation of childcare facilities.
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales━Operating Income （Unit：million yen）

Net Sales
10,709million yen (yoy +1,970 million yen)
Operating Income ▲393million yen (yoy ▲163 million yen)

3,531

3,306

・Net sales rose thanks to the increased operation of childcare
facilities. Nine-month operating income decreased due to arise in personnel expenses in the first quarter. Quarterly
operating income grew, and the segment turned a profit.
・Business was operated in 303 locations across Japan after
opening new facilities in two locations during the fiscal year.
(New facilities in four locations were established in the thirdquarter under review.)

4,025

3,820
3,1532,865
2,568435318248▲73▲165▲404▲546
2019.3
1Q

2Q

3Q

4Q

2020.3
1Q

2Q

3Q© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 14

(BS Business) Health Care
Users of the Sunny Maid Service steadily increased.
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales

Net Sales
1,299million yen (yoy +71 million yen)
Operating Income ▲1,488million yen (yoy ▲780 million yen)

━Operating Income （Unit：million yen）
449423430

446404398381

・Net sales increased thanks to sales growth in the Sunny MaidService. Operating income decreased due to expenses incurred
for the development of a service delivery system that precededprofit.

▲115▲194▲398・Users increased as a result of improving sales promotion incross-selling marketing.
2019.3
1Q

2Q

3Q

▲441

4Q

▲493▲484▲511

2020.3
1Q

2Q

3Q© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 15

(BS Business) Education
Structural reforms through selection andconcentration contributed to the revenue of the Group.
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net SalesNet Sales
8,328million yen (yoy ▲586 million yen)
Operating Income ▲323million yen (yoy ＋2,438 million yen)

3,036
2,893

━Operating Income （Unit：million yen）

2,985

3,027
2,785

2,866
2,677

・Net sales decreased due to structural reforms.
Operating loss was reduced as a result of cost reductions
through the withdrawal from the COCO Juku business.

・The number of students taking lessons at Gaba increased
steadily.
・Continuous implementation of structural reforms.
(Preparation for the closure of franchise schools andNew York University School of Professional Studies Tokyoon March 31, 2020)▲831▲482020.3
1Q

2Q

▲219

▲720

▲1,2102019.31Q▲56▲1,349

2Q

3Q

4Q

3Q

© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 16

(BS Business) Therapy
Net sales grew steadily thanks toan increase in dog grooming salon operation.
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales

Net Sales
568million yen (yoy +129 million yen)
Operating Income ▲121million yen (yoy +154 million yen)

253

・Net sales rose and operating loss decreased thanks to anincrease in dog grooming salon operation. The quarterly operating
result became a profit based on year-end demand.
・Both new and repeat customers increased as a result of
promotional activities appropriate for seasonal demand.
・The A-LOVE Yokohama Motomachi grooming salon was closed
on December 31, 2019. Currently operating 24 salons acrossJapan.

━Operating Income （Unit：million yen）
277

1288

97145146▲85▲792020.3
1Q

2Q

43109

▲107▲152
2019.31Q

▲136

2Q

3Q

4Q

3Q

© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 17

Global Business
Increase in recognition and market development carriedout through business operation using the Group’s expertise
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales

Net Sales
Operating Income

1,283million yen (yoy ▲213 million yen)
▲406million yen (yoy +701 million yen)

502

503

━Operating Income （Unit：million yen）

491
457

430

419

▲138

▲149

▲1424Q

2020.3
1Q

2Q

・Net sales decreased due to organizational restructuring.
Operating loss decreased as a result of raising businessefficiency by concentrating business in northern China.
・Focused on acquiring contracts for facility operation and training
and consulting contracts such as support for the establishmentof long-term care facilities using the Group’s expertise.
・Opened facilities for dementia patients in Tianjin in July 2019
and Beijing in December 2019.

434▲115▲326▲368▲413
2019.3
1Q

2Q

3Q

3Q

© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 18

FY2020.3 Earnings Forecast© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 19

FY2020.3 Earnings Forecast (Consolidated)(Unit :million yen)

Consolidated

Net Sales
Operating Income%Ordinary Income%

Profit attributable toowners of parent%

FY2019.3

FY2020.3

FY2020.34Q

3Q4QAmountAmountRevised forecastyoy(%)

287,822

223,471298,600

3.7%

10,032

9,444

13,300

32.6%

3.5%

4.2%

4.5%

-

5,703

6,083

8,700

52.6%

2.0%

2.7%

2.9%

-

6,108

3,378

4,700

▲ 23.1%

2.1%

1.5%

1.6%

-© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 20

Consolidated Net Sales by Segment(Unit :million yen)

Net Sales

FY2019.3

FY2020.3

FY2020.3

4Q

3Q

4Q

AmountAmountRevised forecastyoy(%)

Medical Support

107,773

85,597

113,900

5.7%

Long-term Care

151,444

115,608

154,100

1.8%Child Care

12,55910,70914,900

18.6%

Health Care

1,632

1,299

1,800

10.3%

Education

11,941

8,328

11,200▲ 6.2%

Therapy547

568

700

28.0%

Global

1,953

1,283

1,800

▲ 7.8%

Others1,410

622900▲ 36.2%Eliminations▲ 1,380▲ 545▲ 700-Total

287,882

223,471298,600

3.7%© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 21

Consolidated Operating Income by Segment(Unit :million yen)

Operating Income

FY2019.3

FY2020.3

FY2020.3

4Q

3Q

4Q

AmountAmountRevised forecastyoy(%)

Medical Support

9,246

7,190

9,8006.0%

Long-term Care

16,383

12,183

16,500

0.7%

206

▲ 393

300

45.6%

Health Care

▲ 1,148▲ 1,488▲ 2,000-

Education▲ 4,110▲ 323▲ 900-

Therapy▲ 383▲ 121▲ 250-

Global

▲ 1,246▲ 406▲ 550-

Others

228

151

200

▲ 12.3%Eliminations▲ 9,143▲ 7,348▲ 9,800-

Total

10,032

9,444

13,30032.6%

Child Care

© 2020 NICHIIGAKKAN CO., LTD. All rights reserved. 22

All performance targets and other forecasts, including numbers ofcontracts and users, and goals, contained in this document are
based on information currently available to the Nichii Gakkan Groupand will be affected by uncertain factors, including economic
circumstances, the relaxation of regulations, and employmentconditions. Please note that actual results, numbers of contracts andusers, and other data may be different from the forecasts.

Contact information
NICHIIGAKKAN Co ., LTD.
PR Division, Public Relations Department
Corporate Governance Headquarters
Address: 2-9 Kanda Surugadai, Chiyoda-ku, Tokyo
Tel: 03-3291-3954 (PR Division)
E-mail: nichii-ir@nichiigakkan.co.jp© 2020 Nichii Gakkan Company. All rights reserved.23