Financial Results for 1H FY2022
November 9, 2022
Benesse Holdings, Inc.

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. As such, actual results may
differ materially from those projected.

1H FY2022 Results Summary andFull-Year Forecasts
Shinsuke Tsuboi
Managing Executive Officer, CFO,
Executive General Manager of Finance & Accounting
Benesse Holdings, Inc.

Financial Results for 1H FY2022

Highlights for 1H FY2022 (YoY)
No sales contribution from Berlitz due to share transfer, lockdown in China and otherfactors lead to YoY decrease in sales and income.
2,300

224.7

2,200

217.4
208.9

Net 2,100
Sales 2,000

201.9
-7.1%

1,900

(Billions of Yen)

250
200
Operating
14.6
Income
150

10.6

8.2

100

1,800

12.9
-18.1％

1,700
50
1,600
1,5000FY19FY20FY21FY22200

FY20FY21

FY225.55.4120180160
Ordinary
140
Income120

FY19Net80
Income*100

12.9
10.58.3

10080

5.060

-21.0％

8.360

4040-2.4％

2.2202000FY19FY20

FY21

FY22

FY19FY20

FY21

FY22*Net income attributable to owners of the parent

3Change in 1H FY22 operating income by segment (YoY)
Increase profits from Education Business in Japan and the sale of Berlitz could not
make up for declining profit in K&F Business and Nursing Care and Childcare
Business, caused by the pandemic of COVID-19 and other factors.
(Billions of Yen)

+0.6-2.0-2.6

12.9+1.9-0.１

10.64

Full-Year Forecasts

Highlights of FY22 full-year forecasts (YoY)
While the forecast has been revised down, operating income is still expected to rise, and net
income to significantly improve, due to the absence of loss on sales of shares of affiliates
resulting from the sale of Berlitz.
5,000
4,800

Net 4,600
4,400
Sales 4,200

300

448.5
427.5

431.9

4,000

417.0

250
21.2
Operating200
Income

＋6.6％

100

3,600
3,400

50

3,200
3,000

0

FY19FY20FY21FY22FY19250

140

OrdinaryIncome 150

120200

21.5

20.1
13.0

150

-3.5％

3,800

(Billions of Yen)

16.7

9.2

100

16.5

15.4＋7.1％

Net 100
Income*80

FY20FY21

FY2211.56.2+980.6%60

3.14050

1.0

2000

FY19

FY20

FY21

FY22

FY19

FY20

FY21

FY22*Net income attributable to owners of the parent

6Change in FY22 operating income forecasts (vs. May Forecasts)
While the COVID-19 pandemic, rising prices, weaker yen and other temporary factors cannot
be ignored, slower profit growth due to changes in the environment in the Education Businessin Japan also had an impact.

-2.1
Changes in thebusinessenvironment
has lowered
the top line.

(Billions of Yen)

-2.1
Weaker yen -3
Rising prices -1
COVID-19 impact -17-0.7±0.0+1.4

Rising prices -7
COVID-19 impact -6
Price revision +7

25.0

Total drop due toexternal factors:
3.5 billion yen

21.57

Change in FY22 operating income forecasts by segment (YoY)
Smaller profit decline expected for K&F and Nursing Care Businesses compared to 1H.
Operating income expected to exceed FY19 levels due to increased profit from Education
Business in Japan, and the removal of Berlitz operating loss from the accounts.
(Billions of Yen)

+1.3

21.2

20.1

-0.3

-1.3

+2.7

-１.1

21.5

8

Progress on Strategy
Hitoshi Kobayashi
Representative Director and President, CEO
Benesse Holdings, Inc.

Executive Summary◼

The forecast for FY2022 has been revised down due to the significant impact ofexternal factors（Operating Income：¥25.0 billion→¥21.5 billion）⇒Reasons for the revision are external factors such as the impact of COVID-19,
rising prices, and the weaker yen, as well as the increasing impact of thechanging education business environment◼

In the Education Business in Japan, changes in education have set off somealarms and early action is being taken◼

On the other hand, the University and Working Adult Business is growing steadily,and since ample opportunities can be identified, further efforts are being madeto strengthen this business10

<Changing environment①>
Decline in children’s motivation to learn※Source：”Parent-Child Survey on Children’s Life and Learning 2022” conducted by The Institute ofSocial Science, University of Tokyo, and Benesse Educational Research and Development Institute (BERD)

Children’s motivation to learn is declining as a result of lifestyle changes brought on by
COVID-19 and exploration of what school education should be（ ）＝ vs FY2019※“Very applicable”+”somewhat applicable” %Percentage of children who “don’t feel like studying”

80.00%
70.00%
60.00%(+20.7pt)(+14.4pt)(+10.3pt)

0.8

64.9%

0.7

62.1%

54.6%
47.7%

40.00%
33.0%

Junior high school

High school

Elementary school students

students

students

Threats

FY20FY2158.9%

0.50.44th – 6th grade

FY1967.8%

0.653.7%

50.00%

30.00%

Percentage of children who “don’t know how to study well”(+5.4pt)(+9.3pt)
73.2%(+19.7pt)
68.2%
61.1%

41.4%

0.3
4th – 6th grade

Junior high school

High school

Elementary school students

students

students

FY22■Decline in learning motivation affects
mainly out-of-school learning

FY19

Opportunities

FY20

FY21

FY22

■Expanding need for parents to motivate
their children to learn■Expanding diverse learning beyond
coursework
11<Changing environment②> Increase in intra-year university entrance exams
Increase in intra-year entrance exams reduces need for preparation for conventional generalentrance exams
Private university admission rates by entrance
exam method

Number of applicants for the National Center Testand the Common Test for University Admissions

65.0%

58.2%
56.5%
54.2%
52.4%
55.0%
51.2%
50.0%49.4%49.3%
50.0%
50.0%50.6%50.7%
48.8%
45.0%
47.6%
45.8%
43.5%
40.0%
41.8%
※Source: Ministry of Education, Culture, Sports, Science and Technology’s “Status of Admissions to National,
60.0%

Public and Private Universities and Junior Colleges”. FY2023 figures are company estimates35.0%General exams
FY16FY17FY18FY19FY20

FY2157.0559

FY22FY23E■More than half of private university students takeintra-year exams.*

564576583

Units: 1,00057755855.053553053.0

FY2023 YoY
preliminary basis-23※51.049.0

Center Test

47.0

Common Test

45.0

FY15

Specific exams*30.0%
FY1559.0

FY16

FY17FY18

FY19

FY20

FY21

FY22

FY23※479,000 applicants as of 17:00 on the FY2023 deadline date (502,000 applicants the previous year）※Source: National Center for University Entrance Examinations■Tendency of examinees to avoid Common Test

*intra-year exams is non-general entrance selection held earlier than general exams■Decreasing need for general entrance
exam preparation
Threats

・Number of people taking simulated exams toprepare for Common Test
・Number of students in final year of high school
using prep schools

Opportunities■Response to growing needs
・Choice of option that suits the individual・Support for basic academic skills and learning skills
at schools with diverse career paths
12<Changing environment ③> GIGA School initiative progress※ Source：“2020-2021 Survey on Curriculum Guidance in Elementary, Junior, andSenior High Schools” （BERD)※Responses from school teachers※「Used in over half of classes（％）」 is the total (%) of「every class」＋「70～ 80% of classes」＋「around half of classes」（％）

One device per student has become widespread and use of digital technology in schools is progressing(school-home barrier is also getting lower)
Frequency of use of ICT devices by teachers in classes ※Municipalities’ adoption rate of paid software(Figures are percentages used in more than half of classes)

100%
90.00%

79%

79% 84%80.00%

70.00%

78%

80%

68%

66%

65%
54%

60.00%

60%

Approx.
60％

Approx.
75％

Approx.
85％

40%

50.00%

20%

40.00%

0%30.00%

Elementary

Elementary

Junior highschool lower

school upper

schoolgradesgrades2021

High school2022■Use of digital technology in schools has increased,
especially in elementary schools

Threats■As school-home barrier becomes even lower,
there is a risk that the advantages of Shinkenzemi
and prep schools will diminish

April 2021

March 2022

March 2023
(Forecast)■Municipalities’ introduction of paid software has reached85%■Municipalities plan to replace “one device per student”
devices in FY2025

Opportunities■Increase in share of paid software when devices
are replaced■Building a new business model by strengthening
collaboration between school business andShinkenzemi business
13

Education Business in Japan：Initiatives based on the current situation of Shinkenzemi

IssuesLaunch of new services to motivate children to learn, including VR learning and a tie-up withNintendo SwitchTM
Decline in children’s motivation to learn as a result of decrease in exam competition ratio and the prolonged
COVID-19 pandemic⇒「Shinkenzemi enrollment down YoY（October -8.8％ YoY for elementary, junior, and senior high school courses）
Junior and senior high school courses in line with plan, but new and continuing enrollment in elementary school courses falls shortResponses

Provide learning services that excite children and awaken their desire to learn
Supporting people with data

Learning like never before
using VR

Tie-up with Nintendo Switch
Learn by playing games alone or with friends

Shinkenzemi score improvement series
forSwitchforNintendo
NintendoSwitchLearn alone

Start offering from the final grade (junior highschool preparation courses

Learn together

Only for new 5th grade ～junior high 1stgrade Shinkenzemi members

14

Education Business in Japan：Shinkenzemi marketing transformation
Confirm effectiveness of experiential marketing that allows people to experience the evolving
value of Shinkenzemi【Examples of high school courses】■Send authentic hands-on teaching materials toexperience the value of Shinkenzemi courses⇒Sending hands-on teaching materials improves sales
efficiency（acquisition cost for each new enrollee
reduced by around 40%）Further strengthen experiential marketing in both scaleand quality for the timing of advancement, when more
people will consider using it

15

Education Business in Japan：School businessHigh school business：Development of study materials to support intra-year entrance exams
Compulsory education：Enhancement of Mirai Seed product lineup ahead of FY2025 replacement of GIGA terminals

High school business

Elementary and junior high school businessChanging environment and impact

Changing environment and impact◼ Steady growth of Mirai Seed as GIGA School
initiative progresses◼ Declining number of students taking Shinken
simulated exams, mainly in last year of high school,
due to increase in intra-year entrance exams

FY22 target
8,900 schools

Cumulative number of examinees in 1H -1.5%(YoY)

7,972 schools
Approx.6,000schools

Initiatives◼ Development and enhancement of products to prepare
for intra-year entrance exams

In sight
9,000 schools

Achievement ProgramApr-21

FY21

FY22（Forecast）

Initiatives◼ Strengthen Mirai Seed product lineup in anticipationof replacement of terminals
16

Education Business in Japan: ：Prep School and Classroom BusinessTokyo Individualized Educational Institute, Inc. and UP Inc. are struggling, mainly for high school students, due toincrease in intra-year entrance exams
Enhance guidance for intra-year entrance exams, expand support for junior high school entrance exams, and reform theenrollment structure

Current situation

Initiatives■September enrollment
・Tetsuryokukai：Steady growth over previous year
・Tokyo Individualized Educational Institute, Inc., UP
Inc., and Ochanomizu Seminar Co., Ltd.
:Struggling, mainly at high school level【Number of Prep School & Classrooms】
AprUnits: 1,000Sep■ProgressUP Inc. enters Tokyo metropolitan area junior highschool Entrance exam business(Shingakukan Rootas)

13121

1211211■Initiatives
Enrollment structure reform aiming for regrowth ofTokyo Individualized Educational Institute, Inc. and UP
Inc.

120

115
110

109111

Integration of UP Inc. and Ochanomizu Seminar Co., Ltd.
9910(Ochazemi Rootas)

9
FY19

FY20

FY21FY22※Enrollment numbers: Total of Tokyo Individualized Educational Institute, Inc., UP Inc,Tetsuryokukai, Ochanomizu Seminar Co., Ltd and Benesse BE studio Inc.(excluding franchises)

17

Education Business in Japan：University and Working Adult business
Steady progress focused on growing reskilling needs (DX, IT human resources development）andincreasing intra-year entrance exams

Trend inUdemyの導入状況
introduction of Udemy
Udemy Business is doing well
Number of companies using Udemy+77％ YoY

916

Developmental education (Shinken-AD)
Increasing need for developmental
education
・Used by 13,731 people in 368 subjects in universities andjunior colleges nationwide ※As of September 2022

Used by over 50% ofNikkei 225 companies

517

end-Sep FY21

end-Sep FY22

Pre-entry and introductory education foruniversities and junior colleges
Gakumon Sakidori Program（Note：Number of active users with ongoing contracts, not cumulative number of companies）

18

Kids & Family Business: China
Recovery from the impact of COVID-19 will take time, but the current market environment is improving

Changing environment＜Number of members in China＞■Negative impact of lockdowns

Unit: million

From the end of March to the end of May, lockdowns due to the COVID-19 policy had
a negative impact on enrollment, including suspension of operations and delivery 140
delays120■Market is improving thanks to steady demand for
education and an easing competitive environment

1.10 1.12

1.03

80・Consumers’ willingness to invest in education remains high60

1.00

0.95
0.82

●double reduction policy（Since 2021 July end）

40‐ Recovery in preschool retention rates which had been affected by competition20
FY20/10

Initiatives（plan）

100・Competitors’ trend to downsize their business after the policy change(double reduction policy)⇒ ‐ Even with lockdowns in Chengdu and Dalian and restrictions on activities in
Beijing etc., the number of members in September rose 13.3% YoY●Lockdowns in major cities including Shanghai（2022 March end～May end）

FY21/4

FY21/10

FY22/4

FY22/10‥‥

FY25/4・Development of new sales methods (offering incentives to existing users for introducing new users,
e-commerce sales on Tik Tok and other new digital platforms ）・Expanding products in the area of thinking skills
・Continuous reinforcement through 1-to-1 communication measures19

Nursing Care and Childcare Business
Quick recovery of occupancy rates, which had declined due to COVID-19, and response tosoaring prices
Changing environment and impact

2H initiatives◼ Occupancy rate lower than expected since August
due to 7 th wave of COVID-19（September occupancy rate: 90%）
※Recent visit numbers have increased as COVID-19
calmed down（October visits on existing homebasis +25% from 2019)◼ Costs higher than expected due to soaring utility
costs
Occupancy rate trend(%)

93

March 2023
occupancy rate
target of 93%
unchanged9291◼ Occupancy increased thanks to trial short stays
Record high number of people tried short stays◼ Effective pricing strategies
Age-based occupancy fees introduced in high-end homes( Aria and high-priced Granda) from October, andoccupancy fees reduced for those over 91 years old■ Resident nursing care price increase in response tosoaring costs (from December)

Absorb the impact of soaring costs by raising usage fees
90
89
21/03

21/06

21/09

21/12

22/03

22/06

22/09

20

Cross-sectional strategies for the Education Business in Japan

Significant changes in education in Japan of particular note
❶ Compulsory education：With the replacement of GIGA terminals in FY2025, the educational environment willchange significantly at the municipal level❷ High school-university connection：Expansion of intra-year entrance exams, major changes in content andlearning methods in high school as well as in motivation for learning

Enhance strategies not only within each businessbut also across domestic education spheres【Compulsory education】
Creation of new business model thattranscends boundaries between
school and out-of-school【High school – universityconnection】【Regional strategy】

Creation of new business modelcompatible with intra-year entrance
exams

Creation of a regional support model
to eliminate educational disparities

Establish Management Reform Promotion Headquarters directly under President
21

Regional strategy：Partnership agreement with Saitama City

Saitama City and four companies are collaborating to support local education（Saitama City Smart School Project: abbreviated as “SSSP”）

Schools,Teachers

Students,
ChildrenFamily,
Guardians
October 31, 2022 SSSP signing ceremony
Left：Mayumi Hosoda, Saitama City Board of Education Superintendent
Right：Hitoshi Kobayashi, President of the Company

BenesseAnalyzing and utilizing Mirai Seed’s learning log data (learninghistory and status) to make effective learning content tailoredto each student possible
22Dividend outlookTarget FY22 dividend per share of ¥60
as originally planned, up ¥10 YoY23The Benesse Group’s vision

Toward attainment of a sustainable society and sustainable growth
To become a corporate group that contributes to solving social issues
people face at every stage of life
Infants～High school students

University students &working adults

Seniors■Diverse learning and paths inaddition to academic skills■Support for teachers and classes
in addition to students■The purpose of learning has
shifted from university admission toemployment and cultivation of work
skills relevant to the times■In addition to residents’ happiness,caregivers’ training and improvementin their working environment24

Announcement

In view of changes in the business environment,a Transformation Business Plan is being
formulated which we expect to announce inMay 2023

25