Presentation of Financial
Results for FY2019
May 25, 2020
Benesse Holdings, Inc.
Tamotsu Adachi
Representative Director, President & CEO
This presentation contains forward looking statements concerning the future plans, strategies, beliefs and performance of Benesse Holdings,
Inc. and its subsidiaries. These forward looking statements are not historical facts. They are expectations, estimates, forecasts, and projections

based on information currently available to the Company and are subject to a number of risks, uncertainties, and assumptions. Accordingly,
users are requested to refrain from making investment decisions solely on the basis of the earnings forecasts contained in this presentation.

Overview of FY2019 Results

Overview of FY2019

Transform and Grow
Benesse 2022

Net sales and operating income up YoY
Steady progress on structural reform⚫

Shift from enrollment growth to profit growth at Shinkenzemi, and pursuitof product digitalization⚫

Had made advances in response to changes in university entrance-exam
system in the School and Teacher Support Business, but overhauled
Education reforms⚫

Product revisions and expansion of EC channel in the Kodomo Challenge inChina⚫

Structural reform at Berlitz, including move to franchises and closure ofcenters⚫

Steady expansion of the Nursing Care Business (+8 homes), improvement
in wages for staff⚫

Selection and concentration policy of withdrawing from noncore businesses
and investing in growth areas, including sale of Simul International Inc.,
acquisition of Study Hacker Inc., taking of stake in Udemy Inc.

Limited impact on FY2019 results from COVID-192

FY2019 Results (YoY)

Transform and Grow
Benesse 2022(￥Billions）

Operating Income

Net Sales
459.0

21.2

448.5

20.0

16.2

439.4

+30.9％+2.1％

FY18ResultInitialForecast

FY19

FY20InitialForecast

FY19FY20Net Income*Ordinary Income
16.7

FY18

Result9.5

16.0
6.2

12.1

4.9

+37.9％+28.3％

FY18

ResultInitialForecast

FY19FY20FY18

ResultInitialForecast

FY19

FY20

*Net Income Attributable to Owners of the Parent

3

FY2019 Results: Analysis of Operating Income (YoY)

Transform and Grow
Benesse 2022

Growth YoY on higher income from Domestic
Education and narrower loss at Berlitz(￥Billions)
250
25.0

+1.5

+3.9200
20.0(0.6)+０.0

YoYchange+5.0(0.0)

15.0
150
10.0100

16.2

21.2

50
5.0004FY2019 Results: Analysis of Net Income (YoY)

Transform and Grow
Benesse 2022

Growth YoY due to higher ordinary income andgain on Simul sale, despite recording of impairment loss(￥Billions)
140
14.0

Main changes fromimpairment●Berlitz: （1.5）●Benesse BE studio: （1.5）

+3.3

120
12.0

+4.6

100
10.0(3.1)80
8.0(0.9)

6.0
60

(2.5)

95

40
4.0
20
2.0

YoYchange+1.3

6.2

4.900
FY18

OrdinaryIncome

Gain on Simul Impairment Other Special Total IncomeSaleLossItems

FY19Tax5

FY2019 Results: Domestic Education

Transform and Grow
Benesse 2022

Net sales up 4.3%, Operating income up 39.6% YoY
200.3

Net Sales

192.0<YoY change>＋3.9

Shinkenzemi: Impact of pricerevision, etc.

＋1.9School & Teacher Support:
Consolidation of Classi Corp. &EDUCOM Corp., etc.

＋2.5

Cram schools, businesses forcollege students and adults,
English education, etc.

+4.3％

FY18

FY19(￥Billions)

14.0

OperatingIncome<YoY change>

＋4.0

10.0

Shinkenzemi: Higher sales(0.1) School & Teacher Support,+39.6％

cram schools, etc.
(-) Increased investment, etc.
(+) Higher salesFY18FY196

FY2019 Results: Global Kodomo Challenge

Transform and Grow
Benesse 2022

Net sales up 0.2%, Operating income down 18.5% YoY
56.556.4

Net Sales+0.2％

FY18(￥Billions)<YoY change>＋0.6 Japan: Impact of price revision,
etc.

＋1.3

Overseas: Impact of pricerevision, etc.

(1.8)

Forex rate impact

FY19<YoY change>

OperatingIncome(0.3)

3.2(-) Increase in marketing costs, etc.
(+) Due to higher sales

2.6(0.1)-18.5％

Overseas(-) Increase in marketing costs, etc.
(+) Due to higher sales in China(0.2)
FY18Japan

Forex rate impact

FY197

FY2019 Results: Nursing Care and Childcare

Transform and Grow
Benesse 2022

Net sales up 5.0%, Operating income down 0.2% YoY
122.8

Net Sales

116.9<YoY change>
+5.0％

＋5.8

FY18

FY1911.3

11.3

OperatingIncome(￥Billions)（0.2）％

Increase in nursing homeresidents, etc.

<YoY change>(0.0)(-) Improve wages for staff,
higher costs for recruitment,etc.
(+) Due to higher sales

FY18FY198

FY2019 Results: Berlitz

Transform and Grow
Benesse 2022

Net sales down 8.6%, Operating loss narrows ¥1.5bn YoYNet Sales(￥Billions)

49.2
45.0

(8.6)％

FY18

FY19

FY18

FY19

OperatingIncome<YoY change>(2.5)

BTS: Impact of franchisingconversion and liquidation ofbusinesses, etc.
ELS: Due to sales of businesses(1.7)

Forex rate impact<YoY change>+1.3(+) Lower costs by restructuring
effect(-) Due to lower sales+0.2

Forex rate impact

+1.5
(3.1)
(4.7)

9

FY2020 Forecasts andMedium-Term Management PlanFY2020 Forecasts and Medium-Term Management Plan

Transform and Grow
Benesse 2022Postponing disclosure of FY20 forecasts
Intend to revise plan in autumn●Postponing disclosure on current difficulty of making
reasonable assessment owing to COVID-19 impact
Earningsforecasts ●Intend to make disclosure as soon as reasonableassessment is possible●May 2020 MTMP revision postponed

MTMP●Intend to revise in autumn after full assessmentof COVID-19 impact

Prioritizing measures to recover from COVID-19
11

Changes in Business Environment from COVID-19

Transform and Grow
Benesse 2022

Irreversible changes from COVID-19⚫ Has reset the global economy, decline in worldwide
growth rates likely to continue in the long term

⚫ Extinguishing of traditional boundaries could
produce new opportunities and growth paths
Expansion in online activities/services including
consumption, education, business activity, somemedical and public services⚫ Ingraining of heightened hygiene awareness andbehavior that avoids disease transmission factors⚫ Rise in working from and time spent at home tocreate new values and needs
12Accelerate Projects to Navigate COVID-19 Era

Transform and Grow
Benesse 2022

Change inexisting
businessmodel

Accelerate transformation of the business model tofurther boost strengths in online/digital education

Hybrid work
stylesIntroduce work styles that combine working fromhome and commuting while raising the value we
provide to society

Reducing
fixed costs

Promote fixed cost cutting and pursue streamlined
management

Spread ofBenesse
valuesSpread Benesse values rooted in sustainability, boost
brand power, instill employee pride as a “company
that is indispensable for society”
13

COVID-19 Adaptation Strategies for
Each BusinessDomestic
Education

Changes in Business Environment from COVID-19

Transform and Grow
Benesse 2022

School closures due to COVID-19 have raised concerns about
educational gaps between families, schools, and regions
Current change

Near-term business reform

Shinkenzemi

Raised expectations forcorrespondence courses,
increased need for online
content

Change in correspondence
course needs, further rise in
online demand

Cram schools,
Englisheducation

Cram school closures have
halted face-to-face teaching,shift demand to online lessons
and video distribution

Face-to-face teaching changes
to avoid close contact,
mix of face-to-face and digital
lessons

Schools

School closures have halted
educational functions, shift toonline lessons

Adapt to the changing school
operations, shift toward
digitalization such as individualized
instruction and CBTNeed business reform to match expected new environment
15

Domestic
Education(Shinkenzemi)

Shinkenzemi: April Enrollments

Transform and Grow
Benesse 2022

Enrollments up 3.3% YoY
Reappraisal of Shinkenzemi’s value as social infrastructure(Thousands of Students)

2018

2019

2020

YoY

YoY

difference

Change (%)

Marketsharechange (%)

Senior HighSchool160150

150(0)

(1.6)

+0.0

Junior HighSchool420

420

420

+0+0.5+0.2

ElementarySchool

1,200

1,240

1,330

+9+6.7+1.5

KodomoChallenge

790

810

810

+0+0.5

+0.3

2,570

2,620

2,710

+9+3.3+0.7(preschool)

Total16

Domestic
Education(Shinkenzemi)

Shinkenzemi: New Enrollments and Retention

Transform and Grow
Benesse 2022

Steady progress in digitalization strategy
Brisk new enrollments, steady retention in April 2020
●New annual enrollments up YoY・2018: 1.01mn ⇒ 2019: 1.05mn

New●New enrollments in April up YoY（＋100,000：+19.4％）
・Inquiries/enrollments increase after nationwide school closures,
declaration of state of national emergency

・Rise in new digital students, ratio of digital students up to 61% (+9p YoY)

●Rate of annual retention steady YoY●Brisk retention rate in May-June, up 1.0p YoYRetention

・Up YoY for all courses (elementary, junior high, senior high school)
・Rise in submissions for Red-pen Teacher service (digitalized content for Yr3-6 elementaryschool students), rise in rate of usage of Shinkenzemi materials

17

Domestic
Education(Shinkenzemi)

Shinkenzemi: Response to Nationwide School Closures

Transform and Grow
Benesse 2022

Responding to school and preschool closuresthrough educational support for students/preschoolers
Main activities in March/April●General practice drills made free
(300,000 paper + 700,000 downloads = 1mn)

●Online classroom “Today’s Schedule”
made free
Shinkenzemi「Spring General Practice Drill」(for elementary, junior high, & senior high schoolstudents)(350,000 users in 7 days)●Start of “Online lessons” for junior high(200,000 views)

Online classroom 「Today’s Schedule」(for elementary & junior high school students)●Distribution of “Prepare for University”
as part of senior high school course
KodomoChallenge●Opening of “Online Preschool”(200,000 views from 90 countries during first month)「Online Preschool」(for preschool students)

Provide ongoing support aiming to solve home study issues
18

DomesticEducation(Cram schools)

Cram Schools, English Language Education

Transform and Grow
Benesse 2022

Accelerate mix of face-to-face and digital lessons withan eye on expected new environment●Schools closed, marketing for new enrollments halted

Change in●Face-to-face teaching expected to change after ending ofbusinessstate of emergency
environment⇒Students to be spread out to avoid close contact (classroom efficiency an issue)Response●Boost marketing after end of state of emergency●Bolster hybrid services mixing “on-site” and “video/online”

Tokyo Individualized
Educational Institute

UP/Ochanomizu Seminar

BE studio

Planned release of 1:2
online instruction

Group lessons to shift tovideo teaching, individual
instruction to move online

Release ofonline + video lessons(June 2020)(May 2020)19

Domestic
Education

Mid-to-long-term Strategy:(Extracurricular) Extracurricular Business Development

Transform and Grow
Benesse 2022

Integration of Zemi Company and Area and Classroom
Education Company in April 2020

Blended learning to support each individualSelf study

Home

Online instruction

Face-to-faceIntegrated
Learning
ManagementSystem(LMS)Classes

Distance learning

20

Domestic
Education(schools/teachers)

School and Teacher Support

Transform and Grow
Benesse 2022

Regional differences in timing of school restarts
Bolster support for school changes●School operations halted by closures●Expected changes in school operations
Change in⇒Review educational services to counter education/aptitude gaps
business
environment ⇒Measures to complete school year: split class attendance,adjust seating layouts to avoid close contact⇒Flow of adjusted school operations schedule

Response●Assess changes in school environments
Propose products/services attuned to new conditions

Mid-to-long- ●Rework digitalization strategy for schools and teachers
term●Expand services for college students and adults
strategy(boost recurrent education services, centered on Udemy)
21Global Kodomo
Challenge

Kodomo Challenge in China

Transform and Grow
Benesse 2022

Business activity almost back to normal
Enrollments down in April, but rebounding●Feb: Some production/business halted, peripheral business including
concerts banned

Change inbusinessenvironment

Response

Mar: Faster-than-expected rebound from COVID-19 impact
Now: business back to normal; people back to work, shipment, andstores open

●April enrollments -6.7％ YoY（better than expected）●Change in consumption patterns (EC shopping +55% YoY)
●Reopen peripheral businesses likestudy schools

Mid-to-long●Rework sales channels (expand EC)
term●Drive to make products fit consumers needs
strategy<Apr enrolments China＞(mn)(6.7)％

1.08

2017
2017年

1.15

1.18

2018
2018年

2019
2019年

1.10

2020
2020年

22

Nursing Careand Childcare

Nursing Care BusinessTransform and Grow
Benesse 2022Prioritize risk response to COVID-19●Self restraint in advertising and other marketing

Change inbusiness●Large cut in new admissions to prevent infections
environment(face-to-face consults down 70-80% YoY in Mar/Apr)●Prioritize care of existing residents⇒ Thorough measures to prevent COVID-19 spread (restrictions onResponsefamily and other visits)⇒Improve family interaction/residents’ QOL when restrictions eased●Restart admissions marketing when restrictions eased●Bolster high-end homes
Mid-to-long●Develop/expand dominance strategy (link hiring strategy totermentry into regions with no current homes)
strategy●Rebuild HR development structure to focus on specialism
23Berlitz
Had steadily decreased losses via structuralreform, but greater changes needed in light of
COVID-19

Transform and Grow
Benesse 2022

Berlitz

Steady structural reform progress through Feb, but
Change in●BTS: Worldwide school closures from April beginning in China
business
environment ●ELS: Halt to school lectures for exchange students in US●All-out shift to online lessons worldwide

Response●Large reduction in costs
Major layoffs (esp. in ELS), restructuring, rent reductions
Use of government support programs for employment aid

Mid-to-longterm
strategy●Accelerate shift to online/hybrid courses (Berlitz 2.0) in response
to extended limits on human contact and movement●Streamline further by reducing/franchising brick-and-mortar
schools24

New businesses/
OthersExpansion into New Areas

Transform and Grow
Benesse 2022

Establish overseas business development HQ●Added to group structure from April 1, 2020
●Drive to focus and expand efforts on targeted new

overseas areas

Pursue new growth strategy via M&A●Bolster competitiveness of existing businesses●Create “third business pillar” to add to education andnursing care25

Capital Strategy

Transform and Grow
Benesse 2022

Plan to maintain DPS at ￥50 in
FY2020with a view to ensuring dividend
stability26