www.nichiigakkan.co.jp

NICHII GAKKAN COMPANY
Financial Results Briefing Document
for the First Nine Months of FY2013
Ending March 2013
(April 1−December 31, 2012)
February. 8, 2013

Todays Contents

１. Overview of the 3Q Financial Results（1） Financial Results
・・・・・Ｐ３（2） Highlights
・・・・・Ｐ４（3） Consolidated Net Sales and Operating Income by Business ・・・・・Ｐ５（4） Increases/Decreases in Net Sales (year-on-year)
・・・・・Ｐ６（5） Increases/Decreases in Operating Income (year-on-year)
・・・・・Ｐ７（6） Segment Highlights, Strategy for Business Scope Expansion ・・・・・Ｐ8 〜11（7） Education Business Sales and operating income breakdown ・・・・・Ｐ12（8） Main education course students year-on-year
・・・・・Ｐ13（9） Overview of Training for Beginning Long-Term Care Staff
・・・・・Ｐ14

2. Financial Results Forecast（1） Financial Results Forecast
・・・・・Ｐ16（2） Financial Results Forecast by Business・・・・・Ｐ17（3） Education Business Sales and Operating income breakdown ・・・・・Ｐ18

3. Strategic investment（1） Progress Strategic Investment（2） Nichii s Language Business: School NetworkCopyright © 2013Nichii Gakkan Company. All rights reserved.

・・・・・Ｐ20〜22・・・・・Ｐ23

1

Overview of the first nine months
FY2013 Financial Results

Copyright © 2013Nichii Gakkan Company. All rights reserved.

2

FY2013 3Q Financial Results（Millions of yen）

FY2012FY2013

3Q

3Q

Amounts
Net sales
Operating income%ordinary income%

Net income%

ＥＢＩＴＤＡ%

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Amounts

188,265
8,654
4.6%

8,633
4.6%

3,903
2.1%

12,373
6.6%

Year-on-year

199,587

6.0%

6,634 ▲23.3％
3.3%-6,126 ▲29.0％
3.1%-2,885 ▲26.1％
1.4%-10,811 ▲12.6%
5.4%-3

FY2013 3Q Highlights

Record 3Q net sales for the 5th consecutive year
Net sales: ¥199,587 million (up 6.0% year on year)

Sales and profits rising at Health Care Business
Health Care: Both sales and profits rose with to an increase in thenumber of users of nursing-care services and improved operationalefficiency.

Strategic investments for stable, long-term growth
Promoted COCO Juku, a new
brand of language schools,
nationwide.

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Strove to build the operating baseof the language education
business in each area of thecountry.

4Consolidated Net Sales and Operating Income by Business（Millions of yen）

Net sales

FY2012FY2013

YOY

3Q

3Q％

77,243

77,9550.9%

Health Care

100,287

106,138

5.8%

Education

10,615

15,458

45.6%

1,099

1,386

26.1%

▲ 980

▲ 1,351-

188,265

199,587

6.0%

Medical support

Other
Eliminations/CorporateTotal（Millions of yen）

Operating

FY2012FY2013YOYIncome3Q

3Q％

Medical support

6,266

6,169

▲1.6%

Health Care

7,527

8,605

14.3%

714

▲ 2,662-▲ 248140-▲ 5,605▲ 5,617-8,654

6,634▲23.3％

Educaiotn
OtherEliminations/Corporate

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

5

Increases/Decreases in Net Sales (Year on Year)
Increase
Decrease(Million yen)

+4,842200,000+287

199,587-370+5,851

195,000

190,000

188,265+711

185,000

3Q FY2012 Medical
Support

HealthCare

Education

OtherEliminations 3Q FY2013/ Corporate

Net sales rose ¥11,322 million year on yearwith sales increasing in all businesses. The number of users increased in the HealthCare Business. GABA in the Education Business became a subsidiary.
Copyright © 2013Nichii Gakkan Company. All rights reserved.

6

Increases/Decreases in Operating Income (Year on Year)
Increase
Decrease(Million yen)

+1,077

10,0008,654-97

8,000

6,634

+389
6,000-11-3,376

3Q FY2012

MedicalSupport

HealthCare

Education

OtherEliminations 3Q FY2013/ Corporate

Operating income declined ¥2,020 million year on year.
Operating income continued to rise in the Health Care Business, reflecting
an increase in the number of users and improved efficiency at facilities, butfell in the Education Business due to strategic investments in thelanguage education business.
Copyright © 2013Nichii Gakkan Company. All rights reserved.

7

FY2013 3Q Segment Highlights (Medical Support Business)
Consolidated Net Sales/OperatingIncome (Year on Year)Sales continued to increase due to strong¥77,955 million (+0.9%)
performance in the hospital business.

Net sales:
Operating income: ¥6,169 million (-1.6%)▶ Won new contracts with hospitals andexpanded the scope of work.

77,95577,243(+0.9%)

6,266

6,169
(-1.6%)▶ Improved operational efficiency byenhancing the staff s skills.
▶ Expanded management support services.

Net sales

Operating incomeConsolidated Net Sales at/ Number ofContracts with Hospitals (Year on Year)- Obtained a patent for the DPC
Revolution system.
- Formed an alliance with MicrosoftCorporation.
Developed management
support services incollaboration with Microsoft.

68,70867,727(+1.4%)Net sales

1,948

1,979
(+1.6%)

Number of contracts(as of Dec. 31)

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Oct.

Started to provide the first contactlessimage operating system for theoperating room in Japan (Opect).

Dec. Launched cloud-based groupware for
medical institutions (MediCloud).
8FY2013 3Q Segment Highlights (Health Care Business)
The adverse effect of the revision of the longterm care insurance system and long-termcare compensation was more than offset by
Net sales:¥106,138 million (+5.8%)
a steady increase in the number of users
Operating income:¥8,605 million (+14.3%) and improved efficiency at branches.
Consolidated Net Sales/Operating
Income (Year on Year)106,138
100,287(+5.8%)

8,605(+14.3%)▶ The number of users increased steadily, both inhome care and facility care, reflecting theaggressive development of facilities.

7,527

Net sales

Dec. 2011

Dec. 2012

Year on year

Home care

136,729

141,527

Up 3.5%

Facility care

8,952

9,854

Up 10.1%

Operatingincome▶ Profitability increased at Nichii Care palace
Company.
Net Sales by Division (Year on Year)- The business has been in the black from thebeginning of the fiscal year.
96,713(+5.1%)▶ Sales in services not covered by long-term care
92,031
insurance rose (up 14.2%).
9,425- Number of users of welfare services for persons(+14.2%)
with disabilities: 12,316 (up 26%)
8,255
- Promoted private brand products and life support
services.
Services covered by Services not covered by ▶ Transferred home helper dispatching service tolong-term care insurance
long-term care
Nihon Support Service Co., Ltd.
insurance
Copyright © 2013Nichii Gakkan Company. All rights reserved.

9

FY2013 3Q Segment Highlights (Health Care Business)■Facility openings
As of Mar 31.2012

As of Dec 31.2012

As of Mar 31.2013(Forecast)Care plan

737

770(＋33)

791(＋54)

Home visit care

1,062

1,096(＋34)

1,122(＋60)

Welfare goods
leasing

135

137(＋2)135

Day care326

350(＋24)356(＋30)

Home nursingcare

2356(＋33)

66(＋43)Hohoemi241

245(＋4)247（＋6）

Kirameki42

51(＋9)

51(＋9)

Nichii Home

5052(＋2)

52(＋2)*Note: Home visit care include a bathing service.
*Hohoemi Forecast revised

Copyright © 2013Nichii Gakkan Company. All rights reserved.

247(＋5)from245 (＋4)

10

FY2013 3Q Segment Highlights (Education Business)
Consolidated Net Sales/OperatingIncome (Year on Year)

Strategic, long-term investment

Net sales:¥15,458 million (+45.6%)▶ Strategic investments to build a nationwide
Operating income: -¥2,662 million(¥714 million in the same period of the previous fiscal
operating base for the language businessyear)- 61 COCO Juku schools (as of December 31)
15,458- Aggressive promotions(+45.6%)
10,615

Allocation of advertising expenditure (first nine months)
Advertisingexpenditure714
Net sales¥2,596m-2,662(-)

Operatingincome

Net Sales by Business (Year on Year)

7,044

8,443

8,089
(-4.2%)(+224.2%)

2,172
Language education
Copyright © 2013Nichii Gakkan Company. All rights reserved.

Existing

MedicalSupport¥598m

Health Care

¥699m

Education¥1,298m▶ The number of students at Home Helper
Level 2 courses increased as thequalifications for nursing care were to berevised.
- Number of students at Home Helper
Level 2 courses
FY2011FY2012Growth rate

45,434

51,23912.8%11FY2013 3Q Education Business Highlights by Brand
Net sales: ¥8,089m (down 4.2% year on year)
Nichii(Existing)

ＣＯＣＯ
COCO塾

Juku

Medical education ¥3,323m (down 13.8% year on year)
Social education ¥4,766m (up 3.9% year on year)

Operating income: down ¥239m (¥164m inthe same period of the previous fiscal year)
Net sales:

Operating income: -¥3,371m

Net sales:
GABA

¥120m

¥6,923m (up 218.7% year on year)

Operating income: ¥778m (up 185.7% year on year)
The operating results of GABA have been included in the consolidated results since the third
quarter of the fiscal year ended March 2012.

Copyright © 2013Nichii Gakkan Company. All rights reserved.

12Main education courses students year on year changes

100%
80%

Medical education（Medical oﬃce administration course）

60%

Social education（Home helper training course）

40%
20%
0%
-20%
-40%
-60%

Jun.
6月

9月
Sep.

12月
Dec.

3月
Mar.

2011年3月期
Year endedMar. 2011

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Jun.
6月

9月Sep.

12月
Dec.

3月
Mar.

2012年3月期
Year ended
Mar. 2012

6月
Jun.

9月
Sep.

12月
Dec.

2013年3月期
Year ended
Mar. 201313

Overview of Training for Beginning Long-Term Care Staff
Career
Career path
path ofof long-termlong-term care
care staff
staff fromfrom April
April 20132013
Current career path

Future career path

Care
Care worker
workerCertifiedCertified care
care worker
worker (tentative(tentative title)title)

Completion
Completion ofof basic
basic training
training forfor
long-term
carestaff
long-term care staff

Care
Care workerworker

Completion
Completion ofof Home
Home Helper
HelperLevel
Level 11 course
courseTraining
Training forfor carecare staff
staff
Completion
Completion ofof training
training forforbeginning
beginning long-termlong-term care
care staff
staff

Completion
Completion ofof Home
Home Helper
HelperLevel
2courseLevel 2 course

Comparison
Comparison between
between Home
Home Helper
Helper Level
Level 22 course
course andand beginning
beginning staff’s
staff’s training
training
Home Helper
Level 2Beginning staff’straining

130 (48)130 (89.5)

End-of-course exam

NoYes

Tuition at the Company

94,248 yen

158,000 yen

Training hours* The figures in parentheses are minimum schooling hours required. (The figure for the beginningstaff’s training is the number of hours required if there is no practical training at facilities.)
Copyright © 2013Nichii Gakkan Company. All rights reserved.

- Both courses require the same numberof training hours, but the beginningstaff’s training requires more schoolinghours (training hours at school).
- The trainees need to pass the endof-course exam.
14

Financial Results Forecast

Copyright © 2013Nichii Gakkan Company. All rights reserved.

15

Financial Results Forecast（Millions of yen）
FY2012FY2013ResultNet Sales

Forecast

Year-on year（％）

257,340

266,800

3.7%

11,6727,200▲ 38.3%

4.5%

2.7%

12,6746,700%

4.9%

2.5%

Net income

5,897

2,900%

2.3%

1.1%

Operating Income%Ordinary income

Copyright © 2013Nichii Gakkan Company. All rights reserved.

▲ 47.1%▲ 50.8%16

Financial Results Forecast by Business
FY２０１２.３
1Ｑ
AmountFY２０１３.３

Half-year
ChangeAmount3Ｑ
AmountChangeFull-year
ChangeAmount1Ｑ
AmountChangeHalf-year
ChangeAmount3Ｑ
ResultChange

Full-year
Forecast Change

Medical Support Section

25,6940.7%

51,4440.4%

77,243

0.2%

103,301

0.1%

25,871

0.7%

51,8690.8%

77,9550.9%

104,100

0.8%

Insurance Services

29,820-60,593-92,031-

127,340-

31,664

6.2%

63,908

5.5%

96,7135.1%

129,800

1.9%

Non-Insurance Services

2,538

-

5,321

-

8,255

-

11,153-

2,988 17.7%

6,152 15.6%

9,425 14.2%

12,2009.4%

32,358

7.6%

65,9147.7%

100,287

7.8%

138,493 11.4%

34,65370,060142,000

2.5%

3,027 ▲20.9%

5,900 ▲16.6%

10,6154.5%

15,451 19.7%

5,087 68.0%

10,152 72.1%

15,458 45.6%

20,400 32.0%

347 ▲26.8%

659 ▲18.2%

1,099 ▲19.2%

1,427 ▲13.1%

487 40.5%

863 31.1%

1,386 26.1%

1,700 19.1%

Health Care Section
Education Section
OthersEliminations
Net Sales
Medical Support Section%
Insurance Services%
Non-Insurance Services

▲295-

▲576-

▲980-

▲ 1,333

▲454-

▲815-

65,6442,086

7.4%

132,132
4,100

7.1%

123,342 3.1%
3,884 31.6%

188,265 4.2%
6,266 27.6%

257,340 6.9%
8,547 21.4%7.6%

7.6%

8.1%

8.3%

-4,136

6.1%

269

-

6.8%

622

-

10.6%

6,546

-

7.1%
--

▲1,400

-

5.6%

8.1%

7.9%

7.9%

8.1%

2,336 28.3%

5,017 21.3%

7,744 18.3%

9,600 11.7%

7.4%

7.9%

8.0%

7.4%

-

302 12.2%569 ▲8.6%860-

1,000 ▲35.5%

9.3%

9.1%

8.2%

2,638 26.2%

5,587 17.4%

8,605 14.3%

10,600 4.5%

%

6.5%

7.2%

7.5%

7.3%

7.6%

8.0%

8.1%

7.5%

Education Section

309%

10.2%

▲144%

▲41.7%

Eliminations
Operating Income

358
6.1%

-▲1,992
2,225 29.3%▲250▲38.0%

714▲54.6%

6.7%
-▲248

4.0%

-▲22.6%4.6%▲55.2%

4.6%- ▲ 5,605▲3,847
4,902 44.1%
8,654 39.9%

3.6%

715

10.1%

▲12.3%

10,142 56.0%▲65.7%

13.9%

6.3%

266,800 3.7%
8,400 ▲1.7%

7,527 46.9%▲64.5%

11.9%

1,550

▲1,351

5.8%

199,587 6.0%
6,169 ▲1.6%

6.7%-106,138

4,758 53.4%

Others

11.7%

981

8,591

6.3%

-61,132 2.8%
1,962 46.2%
1,8217.1%

2,090 67.3%%
Health Care Section%

Change（Millions of Yen)
（単位：百万円）

▲334

▲827-

▲16.3%-▲23.4%

33▲1,978-▲19.5%-

26▲2,662-▲17.2%-

140▲4,800-▲23.5%
-200-

6.8%

3.0%

10.1%

11.8%

▲7,397
11,672 48.3%▲2,0681,863 ▲16.3%▲3,831
3,903 ▲20.4%▲5,617
6,634 ▲23.3%▲7,2007,200 ▲38.3%

4.5%

2.8%

3.0%

3.3%

2.7%

*From the year ending March 31, 2012, Entering in the details of non-insurance services (welfare services for handicapped, housekeeping services etc.,) from health care section.
Copyright © 2013Nichii Gakkan Company. All rights reserved.

17

Education Business Sales and Operating income breakdown
Ｓａｌｅｓ ａｎｄ Oｐｅｒａｔｉｎｇ ｉｎｃｏｍ ｂｒｅａｋｄｏｗｎ【Ｅｘｉｓｔｉｎｇ】（Millions of Yen)

FY２０１２.３
1Ｑ

Half-year

FY２０１３.３

3Q

Full-year

1Q

Half-year

3Ｑ(Result)

Full-year(Forecast)

Medical officeadministration
course

1,409

2,719

3,856

4,955

1,255

2,342

3,323

4,055

Home helper
training course

1,617

3,181

4,586

5,955

1,417

2,919

4,766

6,410

3,027

5,900

8,443

10,911

2,673

5,2618,089

10,465202157164▲242▲213▲478▲239▲760

Net Sales
Operating Income*Home helper training cours : Including E-learning system lecture of hobby， culture，ets.

【ＣＯＣＯ ｊｕｋｕ】（Millions of Yen)

FY２０１２.３
1Ｑ

Half-year

FY２０１３.３

3Q

Full-year

1Q

7

Net Sales
Operating Income

Half-year

3Ｑ(Result)

Full-year(Forecast)

48

120335▲981 ▲2,153 ▲3,371 ▲5,240【ＧＡＢＡ】（Millions of Yen)

FY２０１２.３
1Ｑ

Half-year

Net Sales
Operating Income

FY２０１３.３

3Q

Full-year

1Q

Half-year

3Ｑ(Result)

Full-year(Forecast)

2,1724,540

2,310

4,650

6,923

9,100272603287537778

1,000*Operating Income : after goodwill amortization.
*The full-year forecast of the FY2013.3 has changed a part of breakdown.
Copyright © 2013Nichii Gakkan Company. All rights reserved.

18

Strategic Investment

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19

Progress of Strategic Investment (1)Issues and responses at COCO Juku

Major issues

Response going forward

Increase brand recognition

Effective, efficient advertising
Share marketing expertise to increase enrollment

Strengthen marketing capabilities

Use Nichii s operating base to strengthen
corporate marketing
Use short-term courses to introduce brandStrengthen business
management structure

Copyright © 2013Nichii Gakkan Company. All rights reserved.

Enhance structure for recruiting
and retaining instructors

20

Progress of Strategic Investment (2)Responding to Needsz Courses for adults

Everyday English course, business English course, private
lessensz Courses for elementary school childrenz Special courses
z OptionsGroup lessons of English conversation for elementary schoolchildren
Chatting course, medical course
Active communication course, English writing course, Englishgrammar coursez Trial courses

Everyday English courses (elementary course, intermediatecourse)z Course for qualification TOEIC (R) navigation coursez Career enhancement course
Presentation navigation coursez Other languages
Copyright © 2013Nichii Gakkan Company. All rights reserved.

Chinese course, Japanese course21

Progress of Strategic Investment (3)Synergies with Child Care Business

Since June 2012
Nichii Kids Sangenjaya
Nichii Kids Ariake Center
Nichii Kids Ariake Center #2

July 2013:
Lessons will start at two additional facilities.
The business will continue to expand.
Copyright © 2013Nichii Gakkan Company. All rights reserved.

22

Nichiis Language Business: School Network

COCO Juku：61 schools (as of December 31, 2012)
GABA【Hokkaido】：37 learning studios

JR Tower
Sapporo111【Chubu】

Hokkaido

Niigata, Nagaoka,
Shizuoka,Hamamatsu,
Nagano, Gifu,
Nagoya, Sakae,
Kanazawa,Toyama,
Yokkaichi【Chubu】【Tohoku】

Nagoya, Sakae

Akita,Sendai,
Yamagata

2【Chugoku】
Hiroshima,Okayama

2【Tokyo】

TohokuChubu【Tokyo】
Ochanomizu, Yaesu,
Yurakucho, Kinshicho, Akasaka,
Ikebukuro Higashiguchi,
Shinjuku, Shibuya, Osaki,
Kichijoji, Hachioji, Tachikawa

Chugoku【Kyushu and Okinawa】
Fukuoka, Oita, Kumamoto,Kagoshima,
Naha

3

5

【Shikoku】
Takamatsu,Tokushima,
Matsuyama,
Kochi

4

【Kansai】【Kanto】

Umeda, Kyobashi,
Sakai Higashi, Kyoto,
Nara, Wakayama,
Sannomiya, Kusatsu

Kawagoe, Minami Koshigaya,
Omiya

〜〜

5
【Kansai】
Umeda,
Chayamachi,Namba【Kanto】

Chiba, Kashiwa, Matsudo,
Funabashi

Aobadai, Kawasaki,
Fujisawa-Shonan,
Yokohama,

Takasaki, Utsunomiya,
Tsukuba

Omiya
Chiba, Kashiwa

Kyoto, Kobe

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

30

Yokohama, Kawasaki,Fujisawa, Hiratsuka, Kamiooka

8Kyushuand Okinawa

27

Akasaka-Tameike,
Akabane, Akihabara,
Ikebukuro, Ebisu,
Otemachi, Omotesando,
Kitasenju, Kichijoji,
Ginza-Yurakucho,
Shinagawa, Shibuya,
Shimokitazawa,
Jiyugaoka, Shinjuku,
Shinbashi-Shiodome,
Seijo, Tachikawa, Tokyo,
Hachioji,
Futakotamagawa,
Machida, Meguro

Kanto
Kinki
23

All the profit targets and other forecasts, including the numberof contracts, number of users, and goals contained in thisdocuments, are based on the current information available to theNichii Gakkan Group. Such information is subject to the influenceof factors such as economic circumstances, relaxation ofregulations and employment conditions. Please understand that
actual business performance and other achievements, such as
the number of contracts and number of users, may besubstantially different form the forecasts.

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