Financial Results for the First
Six Months of FY2020
Tamotsu Adachi
Representative Director, President and CEO
Benesse Holdings, Inc.
November 6, 2020
This presentation contains forward looking statements concerning the future plans, strategies, beliefs andperformance 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 materiallyfrom those projected.

Results for the First Six Months ofFY2020 and Full-Year Forecast

YoY Comparison of 1H Results

Sales and profits down YoY, but net sales decline narrows from-9.9% in 1Q and operating income returns to profit after 1Q lossof Yen 5.2bn
2,500
2,400
2,300

Net sales

200180224.7160

208.9

2,200
2,100
2,000

140120

60

1,700

40

1,600

20

1,5000

FY19180
160
140

8.2

80

-7.0％

1,800

(Billions of Yen)

14.6

100

1,900

200

Operating income

FY20Ordinary income
12.9-44.0％FY19FY20120Net income*100

8.38012010060805.060400FY192.2

20-61.0％2040-72.8％

0FY20FY19FY20* Net income attributable to owners of the parent

2

1H FY2020 Highlights
Brisk earnings at Shinkenzemi, recovery trends in theSchool & Teacher Support business and the Cram
School and English Education businesses
Steady growth in new enrollments and retentions at Shinkenzemi, sales and profit
up on rise in total enrollments
・Enrollment growth YoY: April +3.3％ → October +8.1％

Sales/profits down in the School & Teacher Support business and Cram School andEnglish Education businesses on COVID-19 impact, but gradual recovery underway
・Sales (YoY) School & Teacher Support: 1Q -￥4.1bn → 2Q +￥0.5bn
Cram School & English Education: 1Q –￥2.9bn → 2Q +￥0.2bn

Total enrollments fall in China Kodomo Challenge business, concert cancellations
also weigh on sales, but profit up on lower costs; scale of enrollment decline
narrowing recently・Enrollment growth YoY: April -6.7％ → October -3.6％

Sales up but profit down in Nursing Care and Childcare business, occupancy rate
falls on halt in marketing despite expansion in home network and labor costs riseon improvement of wages for staff; gradual restart of marketing activities recently
・Occupancy rate: End-March 95％ → End-September 93％Increased loss at Berlitz on worldwide impact of COVID-19
3

1H (1Q/2Q) Results
Scale of decline in net sales and operating
income narrows QoQ
1H
FY19

FY20

Change

1Q

2Q

ChangeChangeEducation business in Japan

101.4

99.4

(1.9)

(5.1)

+3.2

Global Kodomo Challenge

27.8

27.1

(0.7)

(0.8)

+0.1

Nursing Care and Childcare

60.7

60.8+0.0

(0.1)

+0.2

Berlitz

23.0

13.6

(9.3)

(2.3)

(6.9)

Others

11.5

7.8

(3.7)

(2.1)

(1.6)

224.7

208.9

(15.7)(10.7)(5.0)

Education business in Japan

9.1

6.4

(2.6)

(3.8)

+1.1

Global Kodomo Challenge

2.9

3.0

+0.1

(0.3)

+0.4

Nursing Care and Childcare

5.7

4.1

(1.5)

(0.6)

(0.8)

Berlitz

(2.0)

(3.7)

(1.7)

(0.1)

(1.5)

Others/Reconciliations

(1.0)

(1.6)

(0.5)

(0.3)

(0.2)

Total operating income

14.6

8.2

(6.4)

(5.4)

(1.0)

Total net sales(Billions of Yen)

4

Full-year Forecast for FY2020
Sales and profit down YoY owing to COVID-19
5,000
4,800
4,600

Net sales

300

448.5

250

426.0

4,400
4,200
4,000

3,400
3,000

200

9.3

-56.3％

50

3,200

250

200

100

3,600

(Billions of Yen)

21.2

150-5.0％

3,800

Operating income

0FY19FY20

Ordinary income

1009080

16.770FY19FY20Net income*
6.2

60

150

50-73.2％100

4.5

50-6.2bn

40
30
2001000

FY19FY20FY19FY20* Net income attributable to owners of the parent5Full year Forecast for FY2020 (1H/2H)
Expect net sales decline to narrow HoH,
only slight improvement in operating income
Full year
FY19

FY20

YoY

1H2H

YoY

YoY

(Billions of Yen)

Education business in Japan

200.3

203.2

+2.8

(1.9)

+4.7

Global Kodomo Challenge

56.5

55.5

(1.0)

(0.7)

(0.2)

Nursing Care and Childcare

122.8

124.2

+1.3

+0.0

+1.2

Berlitz

45.0

26.9

(18.1)

(9.3)

(8.7)

Others

23.7

16.2

(7.5)

(3.7)

(3.7)

448.5

426.0

(22.5)(15.7)(6.7)

Education business in Japan

14.0

10.1

(3.9)

(2.6)

(1.2)

Global Kodomo Challenge

2.6

1.4

(1.2)

+0.1

(1.3)

Nursing Care and Childcare

11.3

9.0

(2.3)

(1.5)

(0.8)

Berlitz

(3.1)

(6.8)

(3.6)

(1.7)

(1.9)

Others/Reconciliations

(3.6)

(4.4)

(0.7)

(0.5)

(0.1)

Total operating income

21.2

9.3

(11.9)

(6.4)

(5.5)

Total net sales

6【Forecast】 Change in Operating Income by Segment
Brisk earnings at Shinkenzemi, but large negative impacts fromClassroom & Nursing Home business30

Billions of Yen

25+5.420(9.3)(1.2)

1510(2.3)
(3.6)

21.2

(0.7)

59.3

0
FY19Shinkenzemi

School &Teacher
Support, Cramschool, English
Education

Global Kodomo
Challenge

Nursing Careand Child Care

Berlitz

Others/Reconcilliations

FY20E

7

Forecast for FY2020 in Net Income
Expect net income of zero despite operating
income of around ￥10bn（Billions of Yen）
120

12.0

+1.0

100

10.080

8.0

Breakdown of main items in special loss

(5.8)

60

6.040(0.1)

9.3●Restructuring at Berlitz and others:●COVID-19 related cost:●Others:

4.0

4420
2.0０0

FY20
Operating
IncomeCOVID-19
relatedsubsidies

Intereston lease
payment

Other-nonoperating
income4.5

Ordinary
income

-1.8
-0.5
-0.1

(2.5)

Specialloss(1.9)

0Taxes, etc.

FY20
Net Income8

New Medium-Term Management Plan
FY2021-2025-Evolve core businesses & Challenge new fieldsTamotsu Adachi
Representative Director, President and CEO
Benesse Holdings, Inc.
November 6, 2020
This presentation contains forward looking statements concerning the future plans, strategies, beliefs andperformance 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 materiallyfrom those projected.

Goals of the New Medium-Term Management Plan
Clarify what kind of social issues the Benesse Group will
aim to solve in view of likely structural changes in society
over the next 5-10 years
Shortterm

Mediumand longterm

12

Swiftly recover earnings from the impact ofCOVID-19

・Evolve core businesses
・Challenge new fields with prospects for
fresh growth10Timing for the New Medium-Term Management Plan

Past 5years

Next 5years

Achieved recovery from the earnings downturn caused
by a personal data breach in 2014
Strengthened corporate structure and entered a phasetargeting further growth, but faced significantly alteredconditions owing to COVID-19

Aim for sustainable growth by evolving core businesses
and challenging new growth fields with prospects for
fresh growth11Targets of the New Medium-Term Management Plan
Aiming for a V-shaped recovery in Phase 1,growth from new challenges in Phase 2

Positionof eachphase

Financialtargets&KPI

Phase 1: FY21-22

Phase 2: FY23-25

V-shaped recovery
V-shaped recovery from theimpact of COVID-19 organicallyin existing businesses

Challenge & growth
Sustainable growth throughinorganic means (new challenges inexisting businesses)

Challenge new fields(Moving into new fields and overseas territories by leveraging
Benesse’s strengths)

FY22
Rebuild sales/OP to above
FY19 levels in 2 years※After adjustment forrevenue recognition standards

FY23-FY25Organic growth 3%+ (sales)

Benchmarked to FY22 level after V-shaped
recovery from COVID-19

FY25
OPM 8%+
ROE 10％+12

Solving Social Issues

Societal Conditions in 2030
Deepening structural problems in Japanese society
Falling birthrate

Graying of society

Labor shortage# of under-18s
20202030

Elderly to be

Labor force-12％

Source: “Population Projections for Japan: 2016 to 2065 (2017)”
National Institute of Population and Social Security Research

１/３of Japan’s
population

Source: “Population Projections for Japan: 2016 to 2065 (2017)”
National Institute of Population and Social Security Research

6.44mnshortageSource: “Labor Market Outlook 2030” Persol Research andConsulting Co., Ltd. and Chuo University

Benesse will have even greater responsibilities as one of Japan’s
leading education and nursing care companies
14Company Image for 2030
Benesse has pursued its corporate philosophy of “well-being” for 30 years

By leading efforts to solve educational and nursing care issues inJapan and the rest of the world, Benesse supports all people in theircontinued efforts to improve themselves and have a way of life thatsuits themBenesse Group’s social contributions
As one of Japan’s leading education and nursing care companies
Providing learning to aid
individual growth and fuller lives

Supporting seniors in having a
way of life that suits them

New challenges on global issues

Applying educational and nursing careassets cultivated in Japan to global
educational and nursing care issues
15

Swiftly Recovering fromCOVID-19

Swift Earnings Recovery
Steadily recovering profit to above FY19 levels in FY22
Previous MTMP
Transform and Grow
Benesse 2022

OP(¥ Billions)

New MTMP
Evolve and Challenge: Phase 1

30.0
25.0
20.0
15.0
10.0
5.0

12.6

FY17

16.2

21.2
9.3

FY18FY19

FY20
forecast

FY21

FY22
Plan targets

17Measures for Swift Recovery
Gradual recovery trend recently
Create recovery via rebound in school/nursing care businesses
and further growth at Shinkenzemi
Shinkenzemi

・Greater needs for correspondence courses due to COVID-19
・Brisk materials usage and retentions (1H monthly avg. retention rate +0.7pt YoY)

School &teacher
support・Gradually restore assessment at schools（Shinken Simulated Exams almost back to FY19 levels since July, Oct, 99% of last year)
・ Restore to FY19 levels at Shinken Simulated Exams by FY21, GTEC by FY22

Cramschools

・Schools reopened in June, students attendance also gradually recovering
・Completed online systems, hybrid instruction of face-to-face and online lessons
ready for a possible 2 nd wave of COVID-19
・ Restore profit to FY19 level by boosting marketing in 2H, returning Aprilenrollments to FY19 level in FY21

Nursingcare・Marketing for new residents restarted in July・Further strengthening of new marketing and restore occpancy rate over next twoyears while prioritizing transmission countermeasures

Berlitz

・Online & digital shift for products and marketing via start of Berlitz 2.0
・Optimization of classroom network and increased franchising
・Return to profit in FY2218

Evolve Core Businesses

Evolve corebusinesses

Education Business in Japan

Strategicmeasures

Establish blended learning combining digital/online/classrooms and create platforms providing diverse learning

Swiftly establish
blended learning

 Individual learning
through digital sources Optimize instruction via
video/online/instructors→ Raise retention rate at Shinkenzemi
Create platformsto support
diverse learning
Develop netbased nationwide
cram schoolnetwork

 Respond to growing learningneeds (skills, careereducation,etc.)
 Widen use of more than
0.5mn/pa supplied dedicatedtablets

 Expand services forregions with no cramschools too

Parental support app
Propose optimal learningfor each student

Increase customer
contact points to build
new marketing base(target 10mn DLs)

20

Evolve corebusinesses

Strategicmeasures

Global Kodomo Challenge Business
Expand Shimajiro World to support families
Strengthen products/services and grow contact points via digital Strengthen products through digitalization••Japan

Launch of Shimajiro Club app linked to Tamahiyo
Start of digital lessons

 Expand products/services•••

Online learning business via partner alliances
Start of music streaming, video streaming services
Develop new support services for parents

 Reform sales structure through digitalization

China••

Grow EC channel further
Digitalization of outbound (raise efficiency via AIbased automatic calling) New AI recorded lesson service using digital•

Online lessons using AI recognition and SNS support

AI recorded lesson21Evolve corebusinesses

Nursing Care Business

Strategicmeasures

Increase # of new homes by moving into new areas
Aim for non-contiguous growth in peripheral business Increase # of new homes<High-end home “Aria Ichiban-kan”>

10/yr→12/yrExpand
 Move into new areas (2 of targeted 12)
homeArea growth linked to hiring strategy
network Create distinctive new homes

Boost high-end homes, develop Benesse-version of sensing homes Increase scale of HR recruitment business
Expandperipheral
Aim for non-contiguous growth, e.g. expand
business
nursing fields, move into the child daycare field
Boost HRtraining

 HR training centered on development of specialties
Boost training of in-house qualification holders (dementia, caretechniques, safety management and recurrence prevention)

22

Challenge New Fields

New growth(new fields)

Challenge Themes for New Fields

Seek new challenges in the [Overseas xexisting] and [Japan x new] markets②Universities,
working adults

Existing

DomainNew④Health③Overseas education①Overseas nursing careJapan

OverseasRegion
24New growth(new fields)

Growing the Overseas Nursing Care Business

Using Group strengths to enter the Chinese nursing caremarket
Chinese nursing care
Marketgrowthprospects＜Chinese nursing care services market＞
Market size @JPY10tn Growth rate 9%/pa ※Corporate philosophy/Values

Benesse’sstrengths

Challengefields

 Methods/know-how/systems
for maximizing QOL
Dementia care spontaneous
support method, service
navigation system, etc.

 Care pro training system Data cache on elderly care
 Multi-facility management
know-how Nursing care training ※Already begun 

Nursing care business support

Nursing care facilitymanagement(inc. peripheral fields centered on nursing care HR development)※Facilities and visitation services for those requiring long-term care; market size as of 2020; growth rate 2020203025

New growth(new fields)

Universities, Working Adult Fields

Support for lifelong learning and diverse work styles in the fieldof universities and working adults, a growing social issue
Universities
Marketgrowthprospects

Working adults＜HR recruitment/placement + working adults’ learning＞
Market size @JPY2tn ※Growth prospects①New skill needs: DX/AI/data science staff ②New hiring needs: position-specific/year-roundhiring ③Diverse work styles: second/side jobs ④Middle/senior management retraining needs＜Shinken-AD, Benesse i-Career＞

 Capital alliance with Udemy (US) Marketing/consulting skills foruniversities

 Udemy’s global base

Benesse’sstrengths

 doda campus: 350,000 student members

・ Students 35mn・Tutors 50,000
・ Domestic cases 200+ firms ※As of Sep 20

Challengefields

※

Recruitment/learning support
for university studentsRe-education support for workingadultsCareer support for working adultsMarket size as of 202026

Business base/Capital strategies

Digital Education Services
Further evolve services using extensive digital
education service know-how/PF
0.5mn/pa
3mn total
Dedicated tabletsupply

3,000 high schools(60%)
1.45mn students※As of Oct 20

9,000 ele./juniorhigh schools (30%)
435 local govts※As of Oct 20

200+ firms
60,000+ workers※As of Sep 20

e-Learning Awards

Shinkenzemi HS Course “AI StLike”

2015 METI Minister Award

2019 METI Minister AwardJEPA Chairman’s Award

2020 METI Minister Award
28

Systems to Promote DX
Create systems to promote robust Group DX

Assembly/dispatch ofin-house & external
specialists■Data/AI usage■Architecture redesign■DevOps■Digital marketing■Productivity/RPA■R&D■Hiring/training DX staff29

Capital StrategiesInvest in growth based on Group portfolio and financial strategies
while maintaining a dividend payout ratio of at least 35%
Portfolio strategy adjustment
Determine main investment
areas

Creation of financial strategy
Calculate investment capability inc.
fund procurement based on
operating CF and cash-in-handDetermine fund allocations

Target dividend payout ratio
35%+

Stable shareholder returns linked
to profit growth

Aggressive investment in growth
Investment in next generation ofcore businesses and in
new fields, inc. M&A30

Benesse Group’s approach to SDGs Contributions【Education】
Contribute to thedevelopment ofpersonnel who can tackle
all SDGs issues, with afocus on education【Super-aging society】
Contribute to leading
the adoption of nursing
care as the 18 th goal as
an issue for advancednations

31

New Medium-termManagement Plan
FY2021-2025

Evolve core businesses
Challenge new fields