www.nichiigakkan.co.jp

NICHII GAKKAN COMPANY

Financial Results Briefing Document
for the Fiscal Year Ended March 31, 2015

May 15, 2015

www.nichiigakkan.co.jp

株式会社ニチイ学館
2014年３月期
Overview通期決算
of Financial Resultsfor Fiscal Year Ended March 31, 2015

参考資料

Financial Results Highlights
１. Revenues rose for the 7th consecutive year with record-braking net
sales, while operating income decreased for the 3rd consecutive year
NetsalesNetsales

・ 8 th consecutive revenue growth in the long-term/healthcare segment
Health care segment(Services not covered by long-term care insurance）

Growth of Nichii Life
・Profit growth in the medical support segment

Operating income

・Decrease in the number of students that takeYear on year ▲13.4％

care services

1.3％

up

8.1％

up

5.5％

13,851(Number of students per year)

the introductory care worker courses

・Decrease in the number of users of long-termupYear on year ▲1.4％

150,784（Number of users as of the end of March 2015）

2 . Promotion of new management strategy
・Improvement of the scheme to promotebusinesses in China

Final number of companies
integrated into the group・Promotion of strategic businesses in Japan
Number of COCO Juku Juniorfranchise classrooms
Number of approved child care centers*Including child care centers opened in April 2015

Up 163 year on year
Up 12 year on year

1430320© 2015 Nichii Gakkan Company. All rights reserved.

3

Financial Results Highlights

FY2014※Difference

FY2015

with theexpectation

AmountNet Sales
Operating
Income%Ordinary
Income%Net Income%AmountChangeAmount271,447

271,868

0.2%▲ 2,432

6,322

5,173

▲ 18.2%▲ 2,527

2.3%

1.9%

--4,940

3,144▲ 36.3%▲ 2,566

1.8%

1.2%

--2,831416▲ 85.3%▲ 2,584

1.0%

0.2%

--

※Difference with the November 7, 2014 announcement correction expectation numerical value .
© 2015 Nichii Gakkan Company. All rights reserved.

4

Consolidated Net Sales and Operating Incomeby Segment(Millions of Yen)
※DifferenceNet Sales

FY2014FY2015

Changewith theexpectation%

AmountMedical Support

105,974

106,4890.5%

289Long-term &Health Care

146,744

148,658

1.3%▲ 1,742

18,516

16,757▲ 9.5%

▲ 943

1,330

1,663

25.0%

63Elimination▲ 1,117▲ 1,700－▲ 100Total271,447

271,868

0.2%▲ 2,432

Education
Others(Millions of Yen)

Operating
IncomeMedical Support
Long-term &Health Care

Education
OthersElimination
Total※Difference

FY2014FY2015

Changewith theexpectation％

Amount

8,660

9,134

5.5%

▲ 366

12,77011,886▲ 6.9%▲ 1,914▲ 7,269▲ 7,990－▲ 39045347

664.6%

47▲ 7,885▲ 8,205

4.1%

95

6,322

5,173

▲ 18.2%▲ 2,527※Difference with the November 7, 2014 announcement correction expectation numerical value .
© 2015 Nichii Gakkan Company. All rights reserved.

5Income statement (quarter) according to the section(Millions of Yen)
1Q
Amount

FY2014
2Q
3Q
AmountAmount4Q
Amount1Q
Amount

FY2015
2Q
3Q
AmountAmount4Q
AmountMedical Support

26,31426,456

26,603

26,601

26,412

26,447

26,742

26,888Long-term&Health Care

36,28836,94437,27036,24237,05737,55837,48536,558

5,466

4,407

4,251

4,392

4,176

4,245

4,084

4,252

382

269

400

279

430

322

544

367

Elimination

▲ 291

▲ 187

▲ 365

▲ 274

▲ 355

▲ 278

▲ 562

▲ 505

Total

68,161

67,88868,15967,23967,72068,29568,292

67,561Net Sales

Education
Others(Millions of Yen)

Operating
Income1Q
Amount

FY2014
2Q
3Q
AmountAmount4Q
Amount1Q
Amount

FY2015
2Q
3Q
AmountAmount4Q
AmountMedical Support

1,855

2,045

2,210

2,550

2,286

2,207

2,381

2,260

Long-term&Health Care

3,157

3,447

3,343

2,823

3,266

3,465

2,911

2,244

Education
OthersElimination
Total

▲1169
▲9▲2,107
1,727▲ 2,039 ▲ 1,955 ▲ 2,106 ▲ 1,974 ▲ 2,168 ▲ 1,646 ▲ 2,202▲ 2199▲ 24102

28220▲3▲ 1,929 ▲ 1,865 ▲ 1,984 ▲ 2,421 ▲ 2,072 ▲ 1,791 ▲ 1,921
1,502

1,832

1,261

1,258

1,461

2,076378© 2015 Nichii Gakkan Company. All rights reserved.

6

Major Changes in Net Sales(Millions of Yen)

＋1,914

・Existing － 2.25 billion yen
・Language education＋ 0.5 billion yen

・Hospitals ＋ 1 billion yen
・Clinics－ 0.5 billion yen＋332

271,447＋515

271,868－1,758－582

・Home care・Facility care
・Child care
・Health care

－ 0.9 billion yen＋ 2.1 billion yen＋ 0.4 billion yen＋ 0.3 billion yen

Increase in sales of 421 million yenyear on year
FY2014

MedicalSupportLong-term&
Health Care

Education

OtherElimination

FY2015© 2015 Nichii Gakkan Company. All rights reserved.

7

Major Changes in Operating Income(Millions of Yen)
・Home care・Facility care
・Child care
・Health care

6,322

－ 0.6 billion yen－ 0.02 billion yen－ 0.3 billion yen＋ 0.1 billion yen
・Existing －1.3 billion yen
・Language education＋0.8 billion yen

＋474

＋301

5,173－883－721－319

Decrease in profit of 1,448 million
yen year on year
FY2014

MedicalSupportLong-term&
Health Care

Education

OtherElimination

FY2015© 2015 Nichii Gakkan Company. All rights reserved.

8

Management Strategy

Issues and Management Strategy of Nichii Group

Issues to be addressed

Management Strategy

Responsiveness tochanges in business
人材確保・養成システムのenvironments

Promotion of strategic「グローバリゼーション」を
businesses based on
柱とした戦略事業の推進
globalization

Retention of human resources
and further establishment oftraining systems

Strengthening businesspromotion capabilities throughstrategic recruitment and trainingof human resources

更なる強化© 2015 Nichii Gakkan Company. All rights reserved.

10Structural Reform To Overcome Challenges
Reforming the areas of operation bases for the first time in 12 years

Establishment of a branch system
Placement of branches in four blocks nationwide▶ Formulation and promotion of sales strategies that
adapt to situations in the respective districts▶ Speedy decision-making in response to businesschanges▶ Proactive recruitment, development and promotionof human resources

Establishment of branches with
headquarters functions in fourplaces nationwide
East Japan BranchTokyo BranchWest Japan BranchCentral Japan Branch

Drastic changes to the human resource recruitment scheme forthe first time since the Company’s foundation
Reforming educational systems in branches
Transferring the management of medical administration work and long term care qualification classes
from the branches of the education business to those of the medical support and health care businesses
Expansion ofoperations

Recruitment ofstudents

Guidance for
employment

Acquisition of
Human resources

・Increasing the number of branches from 51 to 98
・51 of the education business branches will be dedicated to the language business.
© 2015 Nichii Gakkan Company. All rights reserved.

11

Promotion of Globalization
China business group company-ization, decision enterprise list12345678910111213141516171819202122232425

Name of company
北京三傑聖一人力資源有限公司
重慶凱爾老年公寓管理有限公司
江門市中家家政服務有限公司
深圳市中家華傭家政服務有限公司
深圳市中家星級服務有限公司
深圳市中家家庭服務有限公司
瀋陽助尓家政服務有限公司
梅州市客家大嫂家政服務有限公司
済南仁徳家庭服務有限公司
広州市正祥和家政服務有限公司
北京無憂草科技発展有限公司
常州金蓓蕾健康諮詢服務有限公司
杭州天使家政服務有限公司
南寧康之橋護理服務有限公司
武漢尓邦家政有限公司
安徽賽菲家庭服務管理有限公司
ハルビン市 H社 （黒竜江省）
大連市
T社 （遼寧省）
天津市
S社 （天津市）
青島市
N社 （山東省）
鄭州市
C社 （河南省）
上海市
CN社（上海市）
西安市
K社 （陝西省）
成都市
M社 （四川省）
検討中

12
345
67

Name of school
重慶市渝北区世達培訓学校
深圳中家職業技能培訓学校
江門市中家職業培訓学校
梅州市華傭職業培訓学校
無憂草東光職業培訓学校
南寧康之橋職業培訓学校
欽州康之橋職業訓練学校※ Current as of May 15, 2015

Continuation consideration item

© 2015 Nichii Gakkan Company. All rights reserved.

12

Promotion of Globalization- Changing the brand in the China businessChanging the brand name in response toa strong request from the local business partner

Changing “至護(Zhihu)” to “日医(Nichii)” andhighlighting the business as a Japanese brand© 2015 Nichii Gakkan Company. All rights reserved.

13

Promotion of Globalization China business schedule

Instructor trainingstarting

Education startingof human resources

1Q
Feb. Jan. Mar.

Apr.

Starting service

2QMayJun.

Jul.

3Q
4Q
Aug. Sep. Oct. Nov. Dec.

Postchildbirthcare
BabysittingHousekeeperLong-term
Care
Sale ofcare
suppliesThe
number ofgroupcompanies

6 companies

6 companies

14 companies

18 companies© 2015 Nichii Gakkan Company. All rights reserved.

14

Promotion of Globalization- Numerical targets for businesses in China
Numerical targets
Number of companies thathave concluded an agreement
for integration into the group20companies

Number of branches

50branches* Aiming for 100 branches in 12 months

Number of staff members
per branch

Number of customers perbranch on a household basis

3,000people

3,000 households© 2015 Nichii Gakkan Company. All rights reserved.

15

FY2016 Earnings Forecast

FY2016 Earnings Forecast(Miliions of Yen)FY2015FY2016

ResultAmountResultAmountChange271,868

294,300

8.3%

5,173

8,900

70.5%

1.9%

3.0%

3,144

6,100%

1.2%

2.1%

Net Income

416

2,600%

0.2%

0.9%

Net Sales
Operating
Income%Ordinary
Income94.0%

524.9%© 2015 Nichii Gakkan Company. All rights reserved.

17

FY2016 Earnings Forecasts Highlights
Growth businesses●China business

Financial consolidation and service launches areexpected to contribute significantly to
medical support , long-term care, health care,child care and other businesses.

Net sales ¥16.2 billion
Operating income ¥1.4 billion●Language business

COCO Juku and COCO Juku Junior are expectedto achieve net sales of 1,350 million yen and650 million yen respectively. GABA is expectedto achieve new record-high sales, while SELC isexpected to post positive operating income.

Net sales ¥13.5 billion(+¥1.3 billion)Operating loss ¥4.6 billion(+1.07 billion)●Long-term care business

The business is expected to restore the trend ofincreases in both sales and profits, absorbing
reductions in long-term care remuneration.

Net sales ¥148.5 billion(+¥3.5 billion)
Operating income ¥11.6 billion(+0.1 billion)

Businesses requiring improvements in profitability
Operating income

Medical administration class
Introductory class for care workers
Subsidiary companies such as theNihon Support Services Company

FY2014FY2015

Changes-¥2.1 billion-¥1.8 billion-¥2.1 billion-¥2.0 billion-¥1.6 billion-¥2.0 billion-¥0.36 billion¥0.0 billion-¥0.36 billion© 2015 Nichii Gakkan Company. All rights reserved.

18

Segment Changes
Points・Distributed the China business to the respective segments as new businesses
・Established child care as a new segment
・Concentrated advertising expenses for COCO Juku in the education segment
・Transferred the medical administration work classes and long-term care qualifications
from the education business to the medical support and health care businesses[New segments][Previous segments]
Education

MedicalSupportLongtermCare
HealthCare

Languages

Medical administration andLong-term careGeneralIn-hospital child care

Hospitals

Clinics
Other child careservices

Home careHousekeeping

Facilitycare

保育

Sales of PB
goods

MedicalSupport

Hospitals

LongtermCare

Home care

HealthCare

Housekeeping

Education

Child care

Medical(China)
administration Post-childbirth careclass/HR development

Clinics

FacilitycareLong-termcareclass(China)
Long-term care/HR
development

Sales of PB
goods

Languages

Child care

(China)Housekeeping/
Sales of care supplies/
HR development

General（China）

development
保 Babysitting/Childcare/HR育© 2015 Nichii Gakkan Company. All rights reserved. 19

FY2016 Earnings Forecast
Forecasts for Full Year Results Net Sales and Operating(Millions of Yen)FY2016FY2015Net Sales

Only the domestic

Domestic

businessbusiness

China businessChangeTotal

ChangeMedical Support

108,378

109,200

0.8%

2,300

111,500

2.9%

Long-term Care

145,008

148,500

2.4%

2,900

151,400

4.4%

Health Care

4,378

4,300

▲1.8%

3,900

8,200

87.3%

Education

12,265

13,60010.9%

013,600

10.9%

Child Care

2,228

2,700

21.2%

6,500

9,200

312.9%

Other

1,313

900

▲31.5%

600

1,500

14.2%

Eliminations▲ 1,703▲ 1,100-0▲ 1,100-

Total

271,868

278,1002.3%

16,200294,300

8.3%

Operating
IncomeFY2016

FY2015

Only the domestic

Domestic

businessbusiness

China businessChangeTotal

ChangeMedical Support

8,039

8,600

7.0%

500

9,100

13.2%

Long-term Care

11,566

11,6000.3%

350

11,950

3.3%

213

800

275.6%

330

1,130

430.5%

Education▲ 6,169▲ 5,100-0▲ 5,100-

Child Care

▲ 706

▲ 600-680

80-

457

200

▲56.2%

▲ 260

▲ 60

▲113.1%▲ 8,228▲ 8,000-▲ 200▲ 8,200

-

5,173

7,500

45.0%

1,400

8,900

72.0%

Health Care

OtherEliminations
Total© 2015 Nichii Gakkan Company. All rights reserved.

20

FY2016 Earnings Forecast

Major Changes in Net Sales（Millions of Yen）

… Domestic business… China business・Child Care＋ 0.4 billion yen

・baby –sitter + 6.5 billion yen＋603＋1,335

・Medical care + 0.3 billion yen＋3,822・Medical affairs education+ 0.5 billion yen

・ Language education＋ 1.3 billion yen
・ Hobby culture － 0.03 billion yen＋6,392・Maternity Care

＋6,972＋187

294,300＋ 2.3 billion yen

・Health Care － 0.1 billion yen＋3,122271,868

・House keeper＋ 3.9 billion yen

・Long-term Care+ 3 billion yen
・Care education＋ 0.4 billon yen

Increase in sales of22,432 million yen year on year
・Domestic ＋6,232 million yen
fi・China＋16,200 million yen

Long-term Care + 2.9 billion yen

FY2015

MedicalSupport

Long-term
Care

HealthCareEducation

ChildCare

OtherElimination

FY2016© 2015 Nichii Gakkan Company. All rights reserved.

21

FY2016 Earnings Forecast
Major Changes in Operating Income… Domestic business・Child Care

… China business＋ 0.1 billion yen（Millions of Yen）

・baby –sitter + 0.7 billion yen
・Health Care・Medical care + 0.3 billion yen
・Medical affairs education+ 0.6 billion yen＋785

・House keeper＋ 0.3 billion yen+ 0.25 billion yen

8,900＋28－517＋1,069

・Maternity Care＋ 0.5 billion yen＋1,061＋917＋384

・Other – 0.25 billion yen
・Other – 0.25 billion yen
・ Language education＋ 1.07 billion yen
・ Hobby culture － 0.01 billion yen

5,173
・Long-term Careｰ 0.35 billion yen
・Care education＋

0.4 billon yen

・Long-term Care + 0.35 billion yen

FY2015

MedicalSupport

Long-termCareHealthCare

Decrease in profit of3,727 million yen year on year
・Domestic＋2,327 million yen
・China＋1,400 million yen

Education

ChildCare

OtherElimination

FY2016© 2015 Nichii Gakkan Company. All rights reserved.

22

FY2016 Earnings Forecast by area

（Millions of Yen）

FY2015Net Sales
Japan,

ChangeFY2016

Operating
IncomeChangeNet Sales

ChangeOperating
IncomeChange271,868

5,173

278,100

2.3%

7,500

45.0%

China－－

16,200－1,400－

Total

271,868

5,173

294,300

8.3%

8,900

72.0%

and others© 2015 Nichii Gakkan Company. All rights reserved.

23

Profit return system
Progress in stock repurchases

Outline of the repurchase program（announced on November 12, 2014)（as of April 30, 2015）

Class of stock to be purchased: Common shares
Total number of shares to be purchased: 8.5 million shares(upper limit)（Represents 12.16% of the total number of shares issued）

Total value of purchase prices: 6,000 million yen (upper limit)
Period of purchase: November 13, 2014 – May 31, 2015
Method of repurchase: Open market purchase through theTotal value of repurchases… 5,416,132,146 yen
Total number ofshares that havebeen repurchased… 5,161,500 shares

Tokyo Stock Exchange

Approx.

90%
Progress ratio ofrepurchases(on a monetaryamount basis)

Changes in the Company’s stock prices（2014/11/13～2015/5/14）

1300

May 14: 1,145 yen

1200
1100
1000

Nov. 13: 902 yen（Stock repurchasescommenced)

900
800
2014/11/13

2015/1/13

2015/3/13

2015/5/13
2015/5/13© 2015 Nichii Gakkan Company. All rights reserved. 24

Profit return system

FY2016 Annuity expectation 22yen(The middle 11yen・The term end 11yen)

2009.3
Dividend
Payout ratio

2010.32011.32012.32013.32014.32015.32016.3

11yen

12yen

14yen

16yen

18yen

20yen

20yen

22yen

-26.3％

27.8％

18.8％

28.6％

49.4％

331.7％

54.4％© 2015 Nichii Gakkan Company. All rights reserved.

25

Initiatives for Corporate Governance Aimedat Corporate Value Enhancement
Review of compensation programs for corporate officers
Abolition of the retirement bonus scheme for corporate officers
Final payments will be implemented with the abolition of the retirement bonuses scheme（Retiring officers：Cash payment; Present officers：Market value-based stock option）

Introduction of a stock option program based on stock-based compensation
Issuance of shares under stock compensation-type stock options as compensation linked tochanges in stock prices over a long period of time.
Maximum number of stocks to be issued per year: 45,000 shares*The Company plans to submit the agenda at an ordinary general meeting of shareholders to be held on
June 25, 2015.

The Company will introduce remuneration linked to long-tem performance, reflecting
corporate value as compensation for the director, and secure an incentive scheme toincrease long-term commitment to growth strategies.
© 2015 Nichii Gakkan Company. All rights reserved.

26

The management index made a target
・Sales growth rate

2 digits growth・Operating marginMore than 7%・ROE

More than 15%（Unit：%）
FY2011

Sales growthrate
Operatingmargin
ROE

FY2012FY2013

FY2014FY2015FY2016(Forecast)

2.3

6.9

3.8

1.6

0.2

8.3

3.3

4.5

2.3

3.3

1.9

3.2

6.9

10.8

7.4

4.6

0.7

4.7

© 2015 Nichii Gakkan Company. All rights reserved.

27

All performance targets and other forecasts, including
numbers of contracts and users, and goals, contained in thisdocument are based on information currently available tothe Nichii Gakkan Group and will be affected by uncertain
factors, including economic circumstances, the relaxation ofregulations, and employment conditions. Please note that
actual results, numbers of contracts and users, and otherdata may be different from the forecasts.

Contact information
Nichii Gakkan Company
IR Division, Public Relations Department
Corporate Planning Headquarters
Address: 2-9 Kanda Surugadai, Chiyoda-ku, Tokyo
Tel: 03-3291-5637 (IR Division)
E-mail: nichii-ir@nichiigakkan.co.jp
28