November 2021
Benesse Holdings Co., Ltd.
FY2021 2Q Results Briefing Q&A Summary■Date and Time：Friday, November 5, 2021 16:00－17:15■Respondents: Hitoshi Kobayashi, Representative Director and President, COO
Shinsuke Tsuboi, Executive Officer, CFO (Chief Financial Officer),Managing Director of Finance and Accounting※ We have taken excerpts from the Q&A session and summarized them. Some of thewording and the order have been modified for ease of understanding

Shinkenzemi BusinessQ. The current scale of Shinkenzemi fee-based optional courses is annual sales of¥5 billion and profit of ¥1.8 billion, but what is your view of the potential for
future expansion?
A. Fee-based optional courses refer to multiple courses in addition to our core Shinkenzemi
courses for those who wish to learn further. These include optional courses incomposition and expression offered to elementary school students on a fee basis, andthe elite EVERES online courses for entrance exams of prestigious schools. The sales andprofit figures mentioned above are for all fee-based optional courses including
programming seminars for elementary school students offered in April this year. Basedon last year’s fee-based optional courses sales of ¥4.0 billion and profit of ¥1.2 billion,
you can see that programming seminars offered this year and other optional courses are
growing steadily. We will continue to expand these optional courses.
We are also developing our online extra-curricular diverse learning courses. There is still
no clear sense of scale, but we expect profit to surpass ¥2 billion within a few years.

Q. Are you concerned about the decrease in cumulative enrollment for
Shinkenzemi in 1H? Is it due to factors other than COVID-19?
A. Yes, the decline in cumulative enrollment is a concern. It is due to both internal andexternal factors. As an external factor, we are now in the second year of COVID-19

and with the GIGA school concept progressing in schools, children are not inspired to
study outside of school.
Internally, looking at the example of junior high school classes, since April we haveenhanced individual learning using digital technology, and are making full use ofdigital tools to support learning in order to bridge the gap between individual
students’ learning progress and goals. However, we realized that a gap had arisen
between our assumptions and the user-friendliness of these tools for children andtheir utilization rates, and made thorough modifications in October. There were small
gaps in elementary school and junior high school courses, but with the use oftechnology the reasons for these gaps can be clearly identified and modifications canbe made. As proof, the retention rate has recovered since October.
The first priority is to prevent gaps from occurring. However, if a gap does arise,
improvements can be made quickly and repeatedly so that learning is notinterrupted. We also intend to take a broader view toward motivating learning,including support for diverse learning.

Kids & Family: Oveseas Kodomo Challenge BusinessQ. You explained the future direction of the business in China in light of changes
in the business environment there, but what impact will the implementation ofyour strategy have on sales and profit?
A ． The business environment in China is changing significantly, and with the sales
methods used until now we can no longer make a profit even if new enrollment
increases. Therefore, we intend to focus on retaining existing students rather thancontinuing to increase new enrollments.
There is a need for programming and STEAMS in China, so we plan to add this type ofdiverse learning to our base of 1.0 ~1.05 million students for existing courses. It is still
too early to provide specific numbers, but we aim to achieve growth with this strategy.
Q. Is the strategy to focus on retention and profits in your business in China?
A. Currently, changes in the environment are significant and sales costs to attract newstudents are very high, so we believe this is the best plan. If the population ofprospective customers were growing or we found a more cost-effective sales method,we might once again expand our customer base. In the current environment, however,
we believe the priority is to establish and strengthen our base of operations.

Berlitz
Q. Regarding Berlitz, are we to assume that by “we’re working towards to making
a decision quickly” you still intend to reach a decision before the end of the term,
as announced at the beginning of the fiscal year?
A. That’s correct. We will make a swift decision during this term.
Q. What options are you currently considering for Berlitz? What has changed since
the beginning of the fiscal year?
A. A few developments have begun taking shape since the beginning of the year, but weare not ready to draw any conclusions. As initially stated, we intend to reach a decision
within this fiscal year and are currently working toward that end. We will inform you
as soon as we have something concrete to share. Right now, I can tell you that various
developments are currently under discussion.
Q. What is the current status of Berlitz?
A. Net sales for this 1H are 13.1 billion yen compared to 13.6 billion yen last year, andthe loss in operating income has been reduced to 1.9 billion yen, compared to 3.7
billion yen last year.
It is unclear whether we can recover sales as planned in the second half of the fiscal
year, but by reducing costs and lowering fixed costs we can keep profits well within
the target.
Q. Will Berlitz be out of the red in FY2022, regardless of what happens?
A. We are still working toward reaching a conclusion within this fiscal year and until wedo, I am not sure how best to answer your question. However, I understand this to bea straightforward question about what we think the FY22 financial status will be if
Berlitz is still functional.
One obvious option is to operate the business as part of the group, but even if thathappens, we still plan to close to break even on profit for FY22. We are not expecting
Berlitz’s losses to have a negative impact on the FY22 operating target of 26 billion
yen, as laid out in the mid-term plan.

Forecast for Next Fiscal Year
Q. How do you plan to achieve the operating income target of 26 billion yen nextyear?
A. We will not be disclosing a breakdown of figures, but rather than one particular businessstanding out, we plan for all to grow. In terms of amount, we expect the largest growth
to be in domestic education, and within that area predict that the growth ofShinkenzemi will be more moderate. The growth of Nursing Care and Childcarebusiness over the next fiscal year will be heavily influenced by the coronavirus
pandemic situation.
Capital Efficiency
Q. The presentation mentioned capital efficiency. What is your approach toincreasing ROE? Improving the profit margin is one method, but what are yourthoughts on shareholder returns?
A. We predict that ROE will return to the upper 3% range in the current fiscal year and,if the targets in the mid-term plan are realized, will grow to the 7% range in the next
fiscal year.
As you pointed out, improving the profit margin is one method. However, with thecontinued rise in tax rates, we are considering various alternative options rather thanincreasing net income with increased profit margin alone. We are also placing
importance on capital efficiency indicators such as ROIC for new investments andbusinesses, when making decision.
Our target for shareholder returns is a dividend payout of 35%, however for the current
fiscal year the dividend payout will be close to 100%. By steadily growing our businessand generating profit, we aim to increase dividends even on the assumption ofpromised dividend payout ratio. In order to achieve this goal, the priority is to meetthe operating income target of 26 billion yen for FY22 of the mid-term management
plan, and to achieve the aims of the profit plan beyond that.