H1 FY Ending February 2020 (FY 2/20)
Presentation
October 9, 2019

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

Agenda1) H1 FY 2/20 Highlights
2) Initiatives for H2

1

FY 2/20

H1 Highlights
Takeharu Tsutsumi
Executive Officer,
Corporate Strategy & Finance/Accounting Officer
Tokyo Individualized Educational Institute, Inc.

Enrolled Students

Increased Across All Segments
Average Enrollment (by Student Category)

30,541

31,888YoY

104.4%

28,49526,94023,921

25,40322,281

11,075

12,09013,05814,506

15,435

16,53817,061 (53.5%)
High School

Middle School

10,753

11,240 (35.2%)

8,803

9,288

9,743

9,834

10,283

2,403

2,543

2,602

2,600

2,776

3,251

3,588 (11.3%)

14.2月期
FY
2/1415.2月期
FY
2/15

16.2月期
FY
2/16

17.2月期FY
2/17

18.2月期
FY
2/18

19.2月期FY
2/19

20.2月期
FY 2/20

Elementary(Students)

YoY by student category: high school 103.2%; middle school 104.5%; elementary school 110.4%* Students enrolled in individualized teaching3,000Net Sales

8 Straight Years Growth in Revenue
H1 Total Net Sales
9,820,000

9,470
8,918,000

8,294

103.7%

7,906,000

7,354
6,688,000,000

Net Sales YoY

6,200
5,898,000
12.2月期
FY 2/1213.2月期FY
2/13

14.2月期FY
2/14

15.2月期
FY 2/15

16.2月期
FY
2/16

17.2月期FY
2/17

18.2月期
FY
2/18

19.2月期FY
2/19

20.2月期
FY 2/20(Millions of yen)4

H1 Total New Members

Affected by Behavioral Changes inHigh School Seniors

20,000H1 Total New Members
18,141 17,986
16,84018,00016,00014,00014,44012,352

15,362

12,987

New Members YoY12,000

99.1%

10,000

8,000

6,000

4,000

2,0000FY 2/14
14.2月期

FY 2/15
15.2月期

FY 2/16
16.2月期

FY 2/1717.2月期

FY 2/18
18.2月期

FY 2/1919.2月期

FY 2/20
20.2月期(Students)* New members in individualized teaching only5

Trends Affecting High School Seniors

Growing Inclination Toward
Recommendations and AO Examination
Percentage of High School Seniors Using Admissions
Channels Other than General Entrance Exam

32.3

28.7
23.8

23.4

Percentage ofStudents Seeking
Enrollment
Outside ofGeneral Entrance
Exam+3.6%PtYoY20162016年

20172017年2018
2018年

2019
2019年

As of Sept. 2. *Other than general entrance exam: designated school recommendation,
open recruitment recommendation, AO, internal advancement; includes unregisteredstudents (tabulated by Tokyo Individualized Educational Institute, Inc.)(%)

6

University Entrance Exam Reforms

Final Year of Exams Under Current
System for Current High School Seniors
Entrance exam format differs for each university/faculty Diversification of test taking
FY2019FY2020 and Beyond

National
center testNew

Common test foruniversity admissions(part of mathematics andMarked + Written Japanese language)

MarkedKnowledge/skill centeredRequires daily “thinking” habits

EnglishEqually focused on

Reading
centered(+ listening)

Listening
Reading

four English skill sets
Reading
Listening
Writing
Speaking

Speaking

Reading

Writing

Listening
7

Opening Dominant Schools

5 Schools Opened in H1
New School Openings
H1 FY 2/20

Newly Opened Schools
635Schools at
期首教室数Year Start

10230240

March 2019

Kameari School (Tokyo)

8

新規開校数
New Schools

Akebonobashi School (Tokyo)

March 2019248

Kaihin Makuhari School (Chiba Pref.)June 2019

Tsukishima School (Tokyo)
July 2019

Ikejiri-Ohashi School (Tokyo)

FY 2/18
Results

FY 2/19
Results

FY 2/20PlanSchools at
Year Start

230

240

248

New
Schools

1088

Schools at
Year End240

248

256

July 2019

H2 FY 2/20

Planned New SchoolOpenings
Ikeda School (Osaka Pref.)November 2019

*Also plan to open two other schools
8Streamlined Ad Spending

Greater Presence in Areas of Operations
from Recognition of Brand Value

,800

,600

Ad Spending & Ratio of Ad Spending to Net Sales
1,587
1,487

26.0%

1,578

1,462

1,411

1,410

,400

1,382

24.0%

22.0%

,200

22.2%
20.0%

,000

19.9%

20.1%
19.0%

800

18.0%

16.0%

600

15.8%
14.9%

400

14.0%

14.1%200

12.0%010.0%

Q2
FY 2/1414.2期2Q

Q2
FY 2/1515.2期2Q

Q216.2期2Q
FY 2/16

Q2
FY 2/1717.2期2Q

Q2
FY 2/1818.2期2Q

Q2
FY 2/1919.2期2Q

Q2
FY 2/20
20.2期2Q(Millions of yen)9

Analysis of Changes in Operating Income (YoY)

Investing with a Mid- to Long-term
Perspective
Analysis of Changes in Operating Income (YoY)
FY 2/19
H1Ad
Increasein sales spending
revenue

28

Personnel
expenses(HQ)

4

FY 2/20
H1Rent(new/increase)-81

Personnel
expenses(Schools)-69

244Businesstax-29-25Trainingandmeeting
costs

Creditfees-18 -11

Shipping andtelecommunications

578

YoY

Windows
Upgrade Teacher
recruitment-10-10+7 million yen
Other 101.3%-15586(Millions of yen)

10FY 2/20 H1 Results (YoY)

Progress of Plan
(Millions of yen)

H1 FY 2/19

H1 FY 2/20

ChangeYoY

Net sales

9,470

9,820

349

103.7%

Cost of sales

6,113

6,339

225

103.7%

64.6%

64.6%

0.0%

-3,3573,480

123103.7%

35.4%

35.4%

0.0%

-2,7782,894

116

104.2%

29.3%

29.5%

0.1%

-5785867101.3%

6.1%

6.0%

-0.1%

-580

588

8

101.5%

6.1%

6.0%

-0.1%

-421

355

-66

84.2%

4.5%

3.6%

-0.8%

-

Cost of sales ratio
Gross profit
Gross profit margin
SG&A
SG&A ratio
Operating income
Operating income margin
Ordinary income
Ordinary income margin
Net income
Net income margin11

FY 2/20 H1 Results

Balance Sheet/Cash Flow Statement(Millions of yen)Feb. 28, 2019
Current assets
Fixed assets
Total assets

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

9,463
2,650
12,114
3,003
4
3,008
9,106
12,114

Feb. 29, 2020

9,134
2,773
11,907
3,149
3
3,152
8,755
11,907(Millions of yen)

H1 FY 2/19

H1 FY 2/20

Operating cash flow

(403)

(316)

Investment cash flow

(183)

(315)

Financing cash flow

(705)

(706)

Increase (decrease) in cash & cash equivalents(1,292)(1,338)Cash & cash equivalents at beginning of year

7,773

8,420

Cash & cash equivalents at end of period

6,481

7,081
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Initiatives for H2

Teacher Numbers

Steady Growth in TeachersTeachers (Aug 31)*Including part-time office staff

5,824

14.2期
FY
2/14

6,937

7,202

15.2期
FY
2/15

16.2期
FY
2/16

8,184

17.2期
FY
2/179,277

18.2期
FY
2/18

10,422

19.2期
FY
2/19

11,185

20.2期
FY 2/20(Teachers)

15

Nationwide Leadership Program

Significant Increase in Scale includingin Aichi and Fukuoka
TEACHERS’ SUMMIT ACADEMY

Areas: Tokyo metropolitan area, Kansai, Aichi,Fukuoka

Leadership Program Planned Participants: 230 (189% YoY)

Satisfaction score ofFY 2/19 participants

4.91(Out of 5)

Job hunt seminar
led by previous year’s participants(alumni) also held16

Measures for Teachers/Price Revisions

Making TKG a More Attractive Place toWork for Teachers
Foster teacher vitality

Expand learning
opportunities(TEACHERS’ SUMMIT, training, etc.)

Review wages(October 2019 onward)

Price revisions(October 2019 onward)
・ For: Individualized teaching business: tuition, training, facilities
Science labs and writing classes: tuition
・ Revision rate: about 5%

17

Addressing Education System Reforms

Correct Information Sharing Using
Strengths in Direct Operations
March: Guidance forparents/guardiansMay: Joint training for employees

March: Training for teachers

Plans for H2 and beyond➢ Monthly: Training for school
principals and teachers➢ November: Seminar forparents/guardians➢ Ongoing: Sharing of informationon university exams
18

FY 2/20 Full-Year Results Forecast

Left Unchanged Based on Progress of Plan
(Millions of yen)

FY 2/19Results

FY 2/20
Forecast

Rate ofchange

Change20,397

21,200802103.9%

Operating income

2,790

2,875

84

103.0%

Operating income
margin

13.7%

13.6%

-0.1%

-Ordinary income

2,793

2,87783

103.0%Net income

1,9321,934

2

100.1%Net income
margin

9.5%

9.1%

-0.3%

-EPS (yen)

35.59

35.64

0.05

100.1%Net sales

19

Shareholder Returns

Steady Shareholder ReturnDividend Payout Results & Forecast
FY 2/16

FY 2/17

FY 2/18

FY 2/19

FY 2/20
Forecast

Full-year
dividend

24 yen26 yen26 yen26 yen26 yenDividend
payout ratio

94.2%

98.1%

80.9%

73.1%

73.0%

Mid-year dividend

12 yen13 yen13 yen13 yenEnd-of-year dividend

12 yen13 yen13 yen13 yen* Includes 8-yen dividend(full-year) for company's
30th anniversary

13 yen(Results)

13 yen* Forecast figuresannounced April 10, 2019

Shareholder Benefits Program
Shareholders are entitled to select one gift from those listed in the shareholder benefits
catalogue (such as food, pre-paid card for purchasing books, donation to social contribution
activity, etc.)20Corporate Identity

Contribute to a happy future for humanity

Medium-termManagement Plan
Plan to announce atApril 2020
Presentation
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Thank you for your attention.

Forward-Looking Statements
These materials include forward-looking statements concerning future financial
performance, including business strategies and forecasts. Such statements are basedon the Company’s judgment at the time of publication, and include inherent risks anduncertainties. These strategies and forecasts may be amended due to changes in theexternal environment or other factors.
If you are an investor outside Japan, please contact us below.
Contact : https://www.tkg-jp.com/contact/
Phone: +81-03-4500-6880
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