www.nichiigakkan.co.jp

NICHIIGAKKAN CO., LTD.

Financial Results Briefing Document
for the 1H of the Fiscal Year Ending March 31, 2020

November 14, 2019

Introduction© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

1

<History of the Medical Support Business>

VISION
2025~Providing an environment that enables medical professionals to dedicate themselves toproviding treatment under Japan’s universal healthcare system, contributing to the advancementof health insurance, and creating an industry out of medical administrative services~
Dec. 1968（Million yen）

1969
Establishes Japan MedicalAdministration Academy(Starts medical administration
education business.)

Contribute to comprehensive

2002

Nichii Gakkan founded.
Establishes medical administration
research center. (Starts medicaladministrative services business.)care for regional areas andFounds the National Medical
Promotion Association withmedical industry working style
Akihiko Terada instated asreform.
1983
Apr. 2017
Chairman.
Establishes Zeniken
Establishes VIPRO Committee
Corporation (current dayfor the medical support
Nichii’s hospital segment) inbusiness.
Chiyoda-ku, Tokyo.
May. 20181991

Establishes VISION 2025.

Sep. 1974

Takes over the National
Medical Administration
Textbook for medicaladministration course Research Association’s healthclinic business.
certified as educational
materials by the Ministry ofHealth, Labour and Welfare.

1980
Sets up branches in all ofJapan’s 47 prefectures.

1968※Sales are consolidated figures1990 1995

Net Sales

2020
2025
(Forecast)© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

2

<History of the Long-term Care Business>

VISION
2025~Contributing to the advent and advancement of Japan’s Long-term Care Insurance System~（Million yen）

Apr. 1996

Contribute tocomprehensive care forregional areas.

Sep. 2007

Launches long-term carebusiness and long-term careeducation business.

Takes over residential care facilities
and in-home care offices fromGoodwill Group.

Apr. 2017

Jun. 1999

Establishes VIPRO Committee
for the long-term care/healthcare businesses.

Akihiko Terada appointed
Chairman of the In-Home Care
Association.

Apr. 2000
Japan’s Long-term Care Insurance
System enters effect.
Nichii plans to establish in-homecaregiver stations nationwide.

2001

Net sales for Longterm Care segment
exceeded 100 billion
yen for year ended
March 31, 2010

May. 2018
Establishes VISION 2025.

Plans to establish nursing care centers(day service centers) nationwide.

Net Sales2000 2001 20022005

2010※Net Sales are the total amount of Long-term care business and Health care business.

2020(forecast)2025© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

3

<History of the Childcare Business>～Helping to solve Japan’s nursery waitlisting problem ～VISION
2025（Million yen）

Aug. 2016

Year ended March 31, 2019
・Net sales exceed 10 billion yen twoyears ahead of schedule.
・Aims to become top company withcompany-led on-site nurseries.

Plans to achieve 10 billion yen in net sales.
Plans to establish branch/company-led
nurseries for all branches/companies.

Apr. 2017

Contribute to measures dealing with Japan’s
declining birthrate and aging population,
help achieve free early childhood/nurseryeducation, and help employees working in
the medical support and long-term carebusinesses.

Oct. 2019

Establishes VIPRO Committee forthe childcare business.

Early childhood/nursery education madefree of charge.

May. 2018
Establishes VISION 2025.

Net Sales
02015

2016

※Sales are consolidated figures

2017

2018

2019

2020
（forecast）

2025© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

4

Overview of Financial Results© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

5

Financial Results Highlights①
Record-high first half net sales every year
for the past five years.
・Sales growth rate yoy+3.7％
Medical Support：+5.9％（yoy ▲0.1％）、Long-Term Care：+1.4％（yoy +1.2%)
Sales growth(Yoy transition)2009.3（2Q）
succeeded COMSN, Inc.、
Contributed to sales
9.6％

2020.3（2Q）
+3.7％

0.0％

© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

6

Financial Results Highlights②
Record-high income followed by 6.36 billion yen
in operating income for the first half.
・Core businesses (medical support/long-term care) contributed.
・“Selection and consolidation”-oriented business restructuring also contributed.
・Percentage operating income to sales exceeded 4.0% for the first time in 16 years.

Operating income（first half year term）transition

66.4 billion yen
8,000（Million yen）
（the highest）

63.6 billion yen

7,000
6,000

5,000
4,000
3,000
2,000
1,000
0
▲1,000▲2,0002004.3

05

06

07

08

09

10

11

12

13

14

15

16

1718

19

2020.3© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

7Overview of Financial Results（Unit: million yen）

FY2020.3

FY2019.3

Difference

2Q

2Q

142,596

147,882+5,286

3.7%

4,154

6,360

+2,206

53.1%

2.9%

4.3%

--

1,947

4,055%

1.4%

2.7%

-

-

Profit attributable to251

1,603+1,351536.8%

0.2%

1.1%

--

Net Sales
Operating Income%

Ordinary Income

owners of parents%(yoy)

Change+2,108 108.2%© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

8

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

FY2019.3
Net Sales

FY2020.3

2Q

2Q
Difference

AmountAmountMedical Support

53,671

56,842+3,170

5.9%

Long-term Care

75,52676,567+1,040

1.4%

5,433

6,684

+1,251

23.0%

779

853

+73

9.4%

5,929

5,651

▲277

▲ 4.7%

185291+106

57.4%

Global

1,005

849

▲155

▲15.5%

Others729

446▲282▲ 38.7%▲ 663▲ 303+359-142,596

147,882+5,286

3.7%

Child Care
Health Care
Education
Therapy

Eliminations

Total

Change(yoy)© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

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

FY2019.3Operating Income

FY2020.32Q2Q

AmountDifference

AmountChange(yoy)Medical Support

4,448

4,949+500

11.3%

Long-term Care

8,019

8,518+4996.2%

Child Care▲ 477

▲ 711

▲234-

Health Care

▲ 309

▲ 977

▲667-

▲ 2,041▲ 104+1,936-

Therapy▲ 288▲ 164+124-

Global▲ 694▲ 291+402-Others

12696▲29▲ 23.0%▲ 4,627▲ 4,954

▲326-

4,154

6,360+2,206

53.1%

Education

Eliminations
Total© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

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

FY2019.3
Ordinary Income

FY2020.3

2Q2Q

AmountAmountDifference(yoy)

ChangeMedical Support

4,520

5,003+483

10.7%

Long-term Care

5,792

6,212+419

7.2%

Child Care

▲ 597

▲ 812▲215-

Health Care

▲ 309

▲ 977

▲668-

▲ 2,073▲ 66+2,006-

Therapy▲ 289▲ 164+124-

Global▲ 729▲ 372+356-

Others130103▲27▲ 21.0%▲ 4,496▲ 4,869

▲372-

1,947

4,055+2,108108.2%

Education

Eliminations
Total© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 11Summary of Balance Sheet (Consolidated)(Unit : million yen)

End of March 2019

End of September 2019

Difference

Current assets

65,684

66,998 +1,313

Fixed assets

127,955

126,631 ▲1,324

193,640

193,629

Current liabilities

60,66462,249 +1,585

Non-current liabilities

91,89889,699 ▲2,198

Total liabilities

152,562

151,949▲613

Total net assets

41,077

41,680+602

193,640

193,629▲11

Total assets

Total liabilities and net assets▲11© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

12Summary of Cash Flows (Consolidated)
FY2016.3

FY2017.3

FY2018.3

FY2019.3

FY2020.3

2Q

2Q

2Q

2Q

2Q

Cash flows from Operating activities

1,028

2,854

9,927

4,823

2,889

Cash flows from Investing activities▲2,761▲ 2,709▲ 479▲ 257▲ 823

Free cash flow

▲1,733

144

9,448

4,566

2,066

1,718

▲ 1,387▲ 10,139▲ 2,456▲ 2,595

12,59913,171

15,57920,36517,508Cash flows from Financial activities

Cash and cash equivalents at end of year

© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

13Segment Overview© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

14

(Core Business) Medical Support
Increased net sales and income for every segment—hospital,clinic, and medical administration education.
Overview of Financial Results
Net Sales
56,842million yen （yoy +3,170million yen）
Operating Income 4,949million yen (yoy +500million yen）

【Quarterly Net Sales &Operating Income】━Operating Income （Unit：million yen）

■Net Sales

28,467
26,794

26,877

27,062

28,37527,040・Increased net sales for the hospital segment thanks to higher
net sales per hospital and consolidation of Yao Medical PFI Co.,
Ltd. (Yao Medical PFI Co., Ltd. – net sales for first half : 2,072
million yen).
・Sales growth for the clinic segment hit 1.9%, the first
positive growth rate in 14 years, due to strengthened sales
setup.
・Number of students for the medical administration course
continues to increase from last year, due to strengthening ofsales promotions.
(student number up 18% year on year).

2,553
2,329
2,119

2019.3
1Q

2Q

2,245

3Q

4Q

2,590
2,359

2020.3
1Q

2Q© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 15

(Core Business) Long-Term CareHigh occupancy of residential care facilities drove increase in net sales
and income. Productivity per staff member increased for the in-homecare service.
Overview of Financial Results【Quarterly Net Sales &Operating Income】━Operating Income （Unit：million yen）

■Net Sales

Net Sales
Operating Income

76,567million yen（ yoy +1,040million yen）
8,518million yen（ yoy +499million yen）
37,448・Increased occupancy rates for residential caresegment.
(Occupancy rates for Nichii Home: +5.8pt from endof Sep. 2018)
・Productivity per in-home care service staff member
increased due to continued efforts to strengthen
support for patients in moderate or severe condition.

・From July: Accepted 6 on-the-job trainees fromChina.

38,0784,370

38,641

37,27738,05938,508

4,455

4,327
4,191
3,909

3,649

2019.3
1Q

2Q

3Q

4Q

2020.3
1Q

2Q© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 16

(Core Business) Child CareNet sales up due to increase in enrolled children.
Continuing to mitigate operating loss alongside active opening of newchildcare facilities.
Overview of Financial Results
Net Sales
Operating Income【Quarterly Net Sales &Operating Income】■Net Sales

3,820

6,684million yen（ yoy +1,251million yen）
▲711million yen（ yoy ▲234million yen）

・Increased number of enrolled children bystrengthening sales to local government bodies andholding promotional events.

━Operating Income （Unit：million yen）

3,531

3,306
2,865

3,153435

2,568248▲73

・Income decreased due to up-front expenses
incurred by opening 48 new childcare facilities in thefirst half.(Total number of facilities: 299; an increaseof 52 over Sep. 30, 2018)
・Compared to last year, making steady progress inimproving income between 1Q and 2Q.

▲165▲404▲546
2019.3
1Q

2Q

3Q

4Q

2020.3
1Q

2Q© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 17

(BS Business) Health Care
Steady progress on building net sales thanks tostronger offerings raising regular user rates.
Overview of Financial Results
Net Sales
Operating Income【Quarterly Net Sales &Operating Income】

853million yen（ yoy +73million yen）
▲977million yen（ yoy ▲667million yen）

449
381

・Increased Sunny Maid Service user rates bystrengthening offerings. This contributed to earnings
alongside higher corporate contract numbers for Nichii
Life.

404398423430▲493▲4842020.31Q

2Q▲115▲194・Income down due to early-stage investment in humanresources alongside increase in foreign staff onboarding.
・From September: Started to offer Sunny Maid Service
within Aichi Prefecture.

━Operating Income （Unit：million yen）

■Net Sales▲398

2019.3
1Q

2Q

3Q▲4414Q© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 18

(BS Business) Education
Continued to reduce operating loss by cutting fixedcosts alongside restructuring efforts.
Overview of Financial Results【Quarterly Net Sales &Operating Income】━Operating Income （Unit：million yen）

■Net Sales
3,036

Net Sales
Operating Income

5,651million yen（ yoy ▲277million yen）
▲104million yen（ yoy +1,936million yen）

2,985

3,027

2,893
2,785

・Decreased operating loss by cutting fixed costs
alongside restructuring efforts (cash flow turned
positive for language education business).

▲56

▲48

2020.3
1Q2Q▲720・After restructuring, Gaba’s net sales grew 3.0%
over 1Q.
・Resolved to close all franchise and NYU School ofProfessional Studies Tokyo schools by March 31,2020.

2,866

▲831

▲1,2102019.3
1Q▲1,3492Q

3Q

4Q© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 19

(BS Business) Therapy

Continued to improve income by increasing user
numbers and sales per customer.
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales

Net Sales
Operating Income

291million yen（ yoy +106million yen）
▲164million yen（ yoy +124million yen）

・ Increased number of users and sales per customer
by strengthening of sales promotions.

━Operating Income （Unit：million yen）
253889712・Improved operation rates via work visualization.
・July: Opened A-LOVE Nagamachi store in Sendai.
Total 25 salons opened nationwide.

2019.31Q

146▲85▲792020.31Q

2Q

109▲107▲152145▲1362Q

3Q

4Q© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 20

Global Business
Reduced operating loss by constructing neworganizations alongside restructuring efforts.
Overview of Financial Results【Quarterly Net Sales &Operating Income】■Net Sales

Net Sales
Operating Income

849million yen（ yoy ▲155million yen）
▲291million yen（ yoy +402million yen）

502503━Operating Income （Unit：million yen）
491

・Improved business efficiency by concentrating
management resources in northern China.
・Continued to focus on receiving contracts for
operation of facilities for dementia patients in China
and securing training contracts.

457

430

419

▲138

▲149▲1424Q

2020.31Q

2Q▲326▲368▲413
2019.3
1Q

2Q

3Q© 2019 NICHIIGAKKAN CO., LTD. All rights reserved. 21

FY2020.3 Earnings Forecast© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

22

The Growth Strategy toward VISION2025 after
Structural reforms
Strengthen existing business models
・Work to split off visiting attendant care business offices from existing
offices.
・Invest approximately 1 billion yen this fiscal year.
・Aim to improve work efficiency by creating opportunities for growth andestablishing market dominance.
FY2000.3

FY2003.3

FY2006.3

FY2009.3

FY2012.3

FY2015.3

FY2018.3

FY2020.3(forecast)

6,274

60,55780,902

99,770138,493

144,633

148,156

154,100

Operating Income（million yen）

▲4,097

3,203

2,010

▲758

10,142

11,647

14,516

16,500Operating margin（％）▲65.3％

5.3％

2.5％

▲0.8％

7.3％

8.1％9.8％

10.7％

Home-visit care service
unit price（yen）-52,360

49,65041,87043,96043,02047,85050,610Residential care service
utilization（％）

---

85.5％

92.4％

88.0％

91.1％

97.0％

Net Sales（million yen）

© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

23

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

Consolidated

FY2019.3

FY2020.3

FY2020.3

4Q

2Q

4Q

AmountAmountInitial forecast

Revised forecast

Corection Amountyoy(%)

Net Sales

287,822

147,882

303,000

298,600▲ 4,400

3.7%

Operating Income

10,0326,36015,200

13,300▲ 1,900

32.6%

3.5%

4.3%

5.0%

4.5%

--

5,703

4,055

11,0008,700▲ 2,300

52.5%

2.0%

2.7%

3.6%

2.9%

--

6,108

1,603

6,700

4,700

▲ 2,000▲ 23.1%

2.1%

1.1%

2.2%

1.6%

--%

Ordinary Income%

Profit attributable toowners of parent%© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

24

Consolidated Net Sales by Segment(Unit :million yen)

Net Sales

FY2019.3

FY2020.3

4Q

2Q

AmountFY2020.3
4Q

AmountInitial

RevisedCorection

forecast

forecast

Amountyoy(%)

Medical Support

107,773

56,842

113,100

113,900+800+5.7%

Long-term Care

151,444

76,567

157,500

154,100▲3,400+1.8%

Child Care

12,5596,684

14,80014,900+100+18.6%

Health Care

1,632

853

3,100

1,800

▲1,300+10.3%

Education

11,941

5,651

11,300

11,200▲100▲ 6.2%

Therapy

547

291

900

700

▲200+28.0%

Global

1,953

849

2,300

1,800

▲500

▲ 7.8%

Others

1,410

446

700

900+200▲ 36.2%Eliminations▲ 1,380

▲ 303

▲ 700

▲ 700

0-Total287,882

147,882

303,000

298,600▲4,400+3.7%© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

25

Consolidated Operating Income by Segment(Unit :million yen)

Operating Income

FY2019.3

FY2020.3

FY2020.3

4Q

2Q

4Q

AmountAmountInitialRevisedCorection

forecast

forecast

Amountyoy(%)

Medical Support

9,246

4,949

9,600

9,800

+200+6.0%

Long-term Care

16,3838,518

17,00016,500

▲ 500

+0.7%

206▲ 711

700

300▲400+45.6%

Health Care

▲ 1,148▲ 977▲ 2,000▲ 2,0000-Education▲ 4,110▲ 104▲ 900▲ 9000-Therapy▲ 383▲ 164▲ 100▲ 250▲150-Global▲ 1,246▲ 291▲ 300▲ 550▲250-Others

228

962002000▲ 12.3%▲ 9,143▲ 4,954▲ 9,000▲ 9,800▲800-10,032

6,360

15,20013,300▲1,900+32.6%

Child CareEliminations
Total© 2019 NICHIIGAKKAN CO., LTD. All rights reserved.

26

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© 2018 NICHIIGAKKAN CO., LTD. All rights reserved.

27