November 10, 2023
Benesse Holdings, Inc.
FY2023 2Q Results Briefing Q&A Summary■Date and Time:Friday, November 10, 2023, 4:00－5:00 p.m.
■Respondents: Hitoshi Kobayashi,
Representative Director and President, CEO
Shinsuke Tsuboi,
Managing Executive Officer, CFO, Executive General
Manager of Finance and Accounting※ We have taken excerpts from the Q&A session and summarized them. Some ofthe wording and the order have been modified for ease of understanding
Q. In regard to MBO, I would like to know what kind of explanation wasprovided by the founding family members.
A. Kobayashi:
The founding family members presented us with a proposal after ourannouncement of the Transformation Business Plan last May.
The outline of the proposal was as follows:
The business environment surrounding the Company is experiencing
significant changes, such as declining birth rate, university entrance
examination reforms, and shortage of human resource for nursing care.

To realize the Transformation Business Plan we announced in May, a longterm and sustainable transformation is unavoidable. To this end,collaborating with an influential external partner to leverage their knowhow and privatize the Company will help us to achieve the plan with ahigher speed and feasibility and thus enhance the corporate value.

EQT Group has founding principles and purpose that are similar to ours.
It also possesses vast experience from developing education and elderly
care platforms worldwide, teams with advanced digital knowledge, and awealth of investment targets. Therefore, EQT is considered the best
possible partner for the Company.

Additionally, the proposal stated that actively working on the company
management under the Transformation Business Plan will increase the probability

of successful achievement of its goals, thereby contributing to further
improvements in the corporate value of the Company.
Q. When did you start your consideration on MBO?
A. Kobayashi:
After the announcement of the Transformation Business Plan on May 19, 2023,
the founding family and EQT presented us with the proposal on May 22, the nextweek.
Provided with their explanation at the end of May, the Company held 18 times ofmeeting of the Special Committee, which consisted of outside directors andoutside statutory auditors to make considerations.
Our executive members also had some discussions with the founding family andEQT, and as consulted by the Special Committee, they expressed opinions onwhether the proposal would contribute to enhancement of the corporate valueor not.
Q. From now on, how will the founding family members involve inmanagement of the Company?
A. Kobayashi:
As mentioned in the press release issued by EQT Group, under the newarrangement, Hideaki Fukutake and myself, currently both directors, plan tocontinue serving as directors of the Company. We are presented with their
proposal of a troika system consisting of EQT Group, Mr. Fukutake, and myself.
Under this system, the shareholders who are also investors and the executive
members will work together on business issues and consider the path to take. Inaddition, we will invite other well-versed persons from outside the Company tothe board of directors and improve the accuracy in decision making of theCompany.
We have been presented with a proposal like this. For the detail, we will discussthem in the future.
Q. The tender offer price is 2,600 yen per share. How much will be the total
amount?
A. Kobayashi:
According to the press release issued by EQT Group, the number of sharessubject to the tender offer is 79,980,331. Multiplying this number by 2,600 yen,the maximum amount of the tender offer will be 207.9 billion yen.
Q. You said that the Company will carry out the transformation that go
beyond the transformation that has been executed so far. Did you mean
to say that the Transformation Business Plan was insufficient?
A. Kobayashi:
We don’t think that the Transformation Business Plan was insufficient. It meansthat we will implement the Transformation Business Plan through MBO and workon some extra matters as well. For instance, there is a proposal for rebuilding
the Education Business in Japan that we might consider expanding it into wider
scope. We will add proposed items to the plan as necessary.
After completion of MBO, we will start discussions on extra items that we should
work on, with the Transformation Business Plan as the basic line.
Q. Shinkenzemi enrollment has been declining. I would like to know thecurrent number of enrollments, since when and how much it has been
declining, and how you think declining birthrate is affecting it.
A. Kobayashi and Tsuboi:
The number of enrollments declined significantly when the personal information
leakage occurred in 2014. We have taken various measures since then and once
succeeded to stop the decline. Under such a situation, we achieved an increasein enrollments in 2020. We believe that we were chosen as the learning partnerat home during the school closures in the COVID-19 pandemic.
The number of Shinkenzemi enrollments in Japan was 2.49 million in April 2022
and 2.21 million in April 2023. It dropped significantly, more than the impact
from the declining birthrate. We believe that the major issues are a decline inchildren’s motivation to learn as well as weaking necessity of learning amid theuniversity entrance examination reform. To address these issues, we will makeinnovations in sale and products in the coming one to two years. We will promotestudy on how we should provide education materials and how the learning should
be to match the learning of today’s children in next-generation models.

Q. I think you are hoping to rebuild Shinkenzemi business with MBO. How will
you do that?
A. Kobayashi:
When we explained to you that leveraging know-how and network of EQT Groupafter this MBO will help us to achieve the plan with a higher speed and feasibility,
we were not only talking about Shinkenzemi.
It is true we are considering for further digitalization of Shinkenzemi byleveraging know-how of EQT Group’s global digital team. However, rebuilding
Shinkenzemi is not the only purpose of MBO.
For example, we believe that, in transformation of University & Working Adult
Business and in development of overseas businesses, we’ll be able to count on
advice and support from EQT Group and draw on its various knowledge andnetworks. Expectation for various opportunities for the entire Transformation
Business Plan was the reason that we expressed our support for MBO.
Q. What kind of digital knowledge does EQT Group have, for example?
A. Kobayashi:
We cannot comment in detail, as the Company and EQT Group have notcompleted examination of each other at a sufficiently deep level. We have apicture of utilizing EQT Group’s experience and know-how in various initiatives
such as OMO (Online Merges with Offline). For specifics, we will consider themfrom now on.
Q. School and teacher support Business (elementary and junior high school
business) has set a goal of further increasing the number of schools thathave introduced Mirai Seed at the timing of the replacement of GIGA
terminals in FY25. Digital materials and tablet devices, including thosefrom competitors, are on the rise. I would like to know about your strategy
on this point.
A. Kobayashi:
We will work on the transformation of core education in two phases. In regard
to upgrading to next generation, we are considering new Shinkenzemi models
including BYOD models. We are considering a fundamental review of the way
learning is provided and way the terminals are used, to change them to forms
that are easier for children to engage in.

If it is allowed to download out-of-school apps like Shinkenzemi onto GIGA
terminals used at schools, both school studies and Shinkenzemi can be provided
on one terminal. However, as different municipality has different regulations, wewould like to think about which path we take, while monitoring the situation.
Q. While sales in mainstay Education Business are on decline, Nursing Care
Business is doing well. Going forward, what will happen to the businessportfolio after MBO?
A. Kobayashi:
In the Transformation Business Plan, the Core Education Business is positioned
as a stable profit generator. In the Core Education Business, rather thanincreasing the top line of sales, we will transform our products andcommunication while addressing issues children and schools are experiencing sothat we can continue to be an indispensable presence.
In the Core Nursing Care Business, we are considering increasing the top line ofsales, with stable growth as the top priority. In addition, we will strengthen new
areas of university & working adult, nursing care, and overseas businesses.
MBO will not significantly change the Company's goals. We will pursue therealization of the Transformation Business Plan with higher feasibility bycapitalizing on EQT Group's know-how, knowledge, network, and expertise in
M&A.
End