FY2020 1H Financial Results Briefing Q&ASummary■Date and time: November 6, 2020 16:00－17:00■Respondents:
Tamotsu Adachi, Representative Director and President, CEOHitoshi Kobayashi, Representative Director and Executive Vice President, COO※Excerpts from the Q&A session are summarized below with some additions and revisions for ease ofunderstanding.

Q：Your forecasts for the Education Business in Japan and the Nursing Care
Business in FY2020 seem conservative. Please comment.
A： Shinkenzemi did very well in 1H. We see a similar trend in 2H, but what happens atschools has an impact. Since schools reopened following temporary closures, completion ofa full year’s curriculum by the end of March is an unreasonable schedule, and there isgrowing concern compared to 1H that students are overworked at school and have theirhands full with homework. With these circumstances in mind, we are taking a carefulapproach to providing support for children to use and continue with Shinkenzemi.
In the Nursing Care business, we are currently providing facility tours to those who request
them in response to notification of the relaxation of visit restrictions from the Ministry ofHealth, Labour and Welfare. while taking ample measures to prevent infection. Even so, thenumber of inquiries and of facility tours has not returned to last year’s levels. Since COVID19 has not completely subsided, people who do not have an urgent need to move into anursing home are being cautious, and our forecast take this into consideration.
Q：The new Medium-Term Management Plan does not mention specific numericaltargets, but the graph on page 17 of the presentation materials seems to indicate aforecast of ¥15 billion in operating income in FY2021. That seems low, given thestrong growth of the Shinkenzemi business. Why is that?
A: Recovery is lagging in some businesses such as GTEC in the School & Teacher Support
business, but with Shinkenzemi’ s strong performance we anticipate a substantial recovery
for the most part. However, the changes in revenue recognition rules from FY2021 will havea negative impact on the Nursing Care business. Also, while we are forecasting aconsiderable improvement in the Berlitz business compared to this year, we are still
predicting losses. We are not providing specific numbers, but expect profit to be about thislevel.
Q：Based on your policy to maintain a dividend payout ratio of at least 35%, doesn’tthat imply a dividend reduction in FY2021?

A：Simply calculated, it is possible that the dividend could be cut in FY2021, but we place
great importance on paying stable dividends to our shareholders. We are confident that ourbusiness will recover, and we are not thinking about reducing our dividend.
Q：What is the scale of investment in new business domains?
A：We are planning to actively invest in new business domains. We have some projects inmind, but since it is not yet clear what shape they will take we cannot provide any specificfigures.
Q：Looking forward to FY2022 and FY2025, what businesses do you expect to grow?
Are new domains included in KPI in your financial targets?
A：In terms of a quick recovery from the COVID-19 crisis, the Nursing Care, School &Teacher Support, and Cram School businesses were hit particularly hard by COVID-19, andthese will be the first to recover. In Phase 2 from FY2023, we are anticipating significantgrowth in the School & Teacher Support business, especially for universities and workingadults. We also expect the Global Kodomo Challenge and Nursing Care businesses to drive
growth.
Our numerical targets are for organic growth, and income from new business domains
should be considered a plus factor.
Q：What is the growth rate and scale of Digital Education Services referred to on
page 28 of the presentation materials?
(Dedicated tablets for Shinkenzemi use, Classi, EDUCOM, Udemy)
A：Approximately 60% of elementary school students and 70% of junior high school
students enrolled in Shinkenzemi in April chose to take the courses using tablets. Students
who choose tablet-based courses are more active and have a high retention rate which iscontributing to sales and income.
Adoption of the Classi platform has soared from the start, with 3,000 schools now using it.
EDUCOM became a Group company last year, and is showing strong growth as part of theGIGA school initiative. Udemy is on the verge of accelerated growth, but already over 200
companies are using the Udemy for Business platform since it was launched almost a yearago.
Q: In the GIGA school and digital agency initiatives, where are the business
opportunities for Benesse’s services from riding the digitalization wave inconjunction with school education?
A: The GIGA school initiative was originally to be rolled out over the next 3-4 years, but thegovernment announced a plan to accelerate the rollout and complete it within this year due
to the impact of COVID-19. What that means is creating the hardware and communication
environment this year, the true shape of the GIGA school initiative.
Very few local governments are prepared for that, and based on interviews with schools itwill take around 2 years to install ICT software and change the way students learn. That isthe reality.
Under these circumstances, EDUCOM is expanding its share of the market considerably forschool-to-home communications services.

In addition, “Miraiseed” software for elementary and junior high schools is already being
used in 4,400 schools, with the #1 market share. As the software is introduced into more
schools over the next 2 years, we expect it to grow steadily as the overall market itself grows.
Q：Can Berlitz turn profitable in 2 years? Please explain how you plan to achieve
profitability.
A: As COVID-19 rages on around the world, it will certainly not be easy to restore profit.
However, “Berlitz 2.0” is starting, and breaking away from classroom-based learning issomething we have been doing for years. We have been closing classrooms withconsiderable restructuring costs. Accordingly, our strategy will shift significantly as we offer
online products that will raise profitability. At the core of this is our goal to once again
increase sales in this business and become profitable. However, we are aware that there
may come a time when we will need to make an objective decision about this business.