Gakken Holdings Co., Ltd. · TSE:9470
Gakken — FY2020 Earnings Presentation
60 slides from Gakken's earnings presentation, Nov 25, 2020
Slide 1: Financial Results for FY Ended September 30, 2020; Medium-Term Plan Gakken 2023
Securities code: 9470 Financial Results for the Fiscal Year Ended September 30, 2020 Medium-Term Management Plan “Gakken 2023” November 25, 2020 Gakken Holdings Co., Ltd.
Slide 2: Agenda
Agenda ◎Financial Results for the Fiscal Year Ended September 30, 2020 ◎Medium-Term Management Plan “Gakken 2023” 1. Review of “Gakken 2020,” the Previous Medium-Term Management Plan 2. Long-Term Management Policy: Towards 2030 3. Overview of “Gakken 2023,” the New Medium-Term Management Plan © 2020
Slide 3: Financial Results for the Fiscal Year Ended September 30, 2020
Financial Results for the Fiscal Year Ended September 30, 2020 Satoru Nakamori Executive Managing Director Gakken Holdings Co., Ltd.
Slide 4: Consolidated Financial Results (Summary)
Consolidated Financial Results for the Fiscal Year Ended September 30, 2020 (Summary) Net sales: Revenue increased for the 11th consecutive year, led by the healthcare and nursing domain Operating profit: Rose for 6th consecutive year and achieved a record high since the shift to a holding company s
Slide 5: Factors Behind Changes in Operating Profit
Factors Behind Changes in Operating Profit (Million yen) Reduction in SG&A expenses through the use of Zoom and Slack, and thorough cost control + 3,005 +517 +585 (1,579) (1,976) Revenue Reduction in advertising Other SG&A expenses increase expenses FY9/19 result Increase in Reduction in traveling,
Slide 6: Consolidated Financial Results (Difference)
Consolidated Financial Results for the Fiscal Year Ended September 30, 2020 (Difference) Net sales and operating profit: Ended almost in line with the plan despite the coronavirus crisis Profit: Underperformed the plan due to impairment loss, loss due to the new coronavirus infection, an increase in
Slide 7: Consolidated Financial Results (Financial Position)
Consolidated Financial Results for the Fiscal Year Ended September 30, 2020 (Financial Position) Total assets: Increase in cash and deposits; increase in property, plant and equipment; and decrease due to sale of investment securities Interest-bearing debt: Issued straight bonds (social bonds) total
Slide 8: Consolidated Financial Results (Cash Flows)
Consolidated Financial Results for the Fiscal Year Ended September 30, 2020 (Cash Flows) Cash flows from operating activities: Increase in profit before income taxes; decrease in depreciation; increase in impairment loss, etc. Cash flows from investing activities: Sale of cross-held shares Cash flow
Slide 9: Results by Segment for the Fiscal Year
Results by Segment for the Fiscal Year Ended September 30, 2020 Educational Domain: Learning center and classroom business was significantly affected by the coronavirus crisis; the publishing business was strong due to the self-quarantine-related demand. Healthcare and Nursing Domain: Revenue and pr
Slide 10: Factors Behind Changes in Operating Profit by Segment
Factors Behind Changes in Operating Profit by Segment (Million yen) Education Service Business: The number of customers of the Gakken Classroom and cram school businesses decreased due to the coronavirus infection Education Contents Business: The self-quarantine-related demand contributed to the gro
Slide 11: Results by Segment: Education Service Business
Results by Segment <Education Service Business> (Million yen) Business overview Results trends • Operation of Gakken Classroom for toddlers, elementary and junior high school students (mainly elementary school students) (Net sales) Net sales Operating profit (Operating profit) • Operation of cram sc
Slide 12: Results by Segment: Education Contents Business
Results by Segment <Education Contents Business> (Million yen) Business overview Results trends • Publication and distributionof children’s books, study-aid books, study materials for adults, etc. through agencies and bookstores (Net sales) Net sales Operating profit (Operating profit) • Publication
Slide 13: Results by Segment: Educational Solution Business
Results by Segment <Educational Solution Business> (Million yen) Business overview Results trends • Production and sales of publications, childcare products, playing and other equipment, and kindergarten and nursery school uniforms; and operation of (Net sales) Net sales Operating profit (Operating
Slide 14: Results by Segment: Healthcare and Nursing Business
Results by Segment <Healthcare and Nursing Business> (Million yen) Business overview Results trends • Planning, development and operation of serviced apartments for the elderly, group homes for the elderly with dementia, bases for home-based care and (Net sales) Net sales Operating profit (Operating
Slide 15: MEMO
MEMO © 2020 GAKKEN HOLDINGS CO.,LTD. 15
Slide 16: Medium-Term Management Plan Gakken 2023
Medium-Term Management Plan “Gakken 2023” November 25, 2020 Hiroaki Miyahara President, Representative Director Gakken Holdings Co., Ltd.
Slide 17: Contents
Contents 1. Review of “Gakken 2020,” the Previous Medium-Term Management Plan 2. Long-Term Management Policy: Towards 2030 3. Overview of “Gakken 2023,” the New Medium-Term Management Plan 1. Management Policy 2. Basic Policy and Priority Initiatives – Business Domains • Educational Domain • Healthc
Slide 18: Review of Gakken 2020, the Previous Medium-Term Management Plan
Review of “Gakken 2020,” 1 the Previous Medium-Term Management Plan
Slide 19: Review of Gakken 2020: Basic Policy and Priority Initiatives
Review of Gakken 2020: Basic Policy And Priority Initiatives Gakken 2020 Pioneering a new era by mobilizing the Group’s resources Pioneering a new era driven by two 7 initiatives for reinforcing the growth engines management foundation Healthcare and Educational Domain Nursing Domain Business strate
Slide 20: Review of Gakken 2020: Progress on Financial Indicator Targets
Review of Gakken 2020: Progress in Achievement of Financial Indicator Targets • Made good progress throughout FY2019 and until 1H of FY2020 • The adverse impact of the coronavirus crisis was kept below levels anticipated for the 2H (Apr.-Sep.) of FY2020 (Billion yen) Revised performance Results for
Slide 21: Review of Gakken 2020: Summary
Review of Gakken2020: Summary △＋ FY2019 saw strong growths in both sales and profit. Kept the impact of the coronavirus crisis limited during the 2H of FY2020 Performance Targets Compared to the revised plan, sales outperformed the target but profit was slightly below the target. Selection a
Slide 22: Long-Term Management Policy: Towards 2030
Long-Term Management Policy: 2 Towards 2030
Slide 23: Gakken's History and DNA
Background to Policy Formulation: Gakken’s History and DNA “Education is the key to Japan’s postwar reconstruction” —The conviction of the founder, late Hideto Furuoka 1947 1960s 1980s 1990s 2000s 1946: Gakusyu Kenkyusha founded - Commenced publication of “Gakushu (Learning)” 1947: Published referen
Slide 24: Years of Structural Reform under the Holding Company Structure
10 Years of Structural Reform under the Holding Company Structure Change of business structure has progressed with new business development and proactive M&As 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009: Shifted to a holding company structure; suspended the publication of “Kagaku (Sc
Slide 25: Renewing the Group Vision and Gakken Spirit
Towards 2030 Renewing the Group Vision and Gakken Spirit Create Solutions Beyond Your Imagination [Gakken Spirit] Think deeply for people and society. Keep on learning. Possess passion and speed. Harness the power of the individual for the strength of the group. Do not be satisfied with the status q
Slide 26: Gakken's Value Creation Model
Gakken’s Value Creation Model Reaffirm Gakken’s Management Strategic business Creation of social value Economic value aspirations resources activities Gakken Group’s Education Gakken Social Value strengths • Create new approaches to, and • Group Philosophy opportunities for, learning at Create a wor
Slide 27: Group's Business in 2030: Long-Term Management Policy
[Long-Term Management Policy] Group’s Business in 10 Years Time ‣The digital domain generates over 40% of the Group’s earnings. ‣Globally operated businesses generate over 30% of the earnings. Digital Global Business earning Over 40% structure in 2030 Over 30% Investment for growth Milestones: 2025
Slide 28: Overview of Gakken 2023, the New Medium-Term Management Plan
Overview of “Gakken 2023,” 3 the New Medium-Term Management Plan
Slide 29: Positioning of Gakken 2023
Positioning of Gakken 2023 Forecast Backcast 2030 Vision Gakken 2020 Gakken 2023 Mobilize the Group’s resources to pioneer a new era 2019 2020 2021 2022 2023 2025 2030 With-COVID-19 Uncertainties become the norm. Society and lives change at an accelerated pace. ● Adaptation to “new normal” resulting
Slide 30: Gakken 2023 Management Policy
Gakken 2023 Management Policy “Establishment of a solid foundation for growth” Education Healthcare and nursing Creation of new approaches to Seek to be a top company learning and a diverse range of contributing to development of learning opportunities sustainable towns Acceleration of DX and global
Slide 31: Business Domains
Gakken 2023: Basic Policy and Priority Initiatives Business Domains
Slide 32: Educational Domain: Basic Policy and Priority Initiatives
[Educational Domain] Basic Policy and Priority Initiatives “Creation of new approaches to learning and a diverse range of learning opportunities” ◉ Promotion of individually optimized learning through “smart education,” digital transformation of education Targeted ◉ Development of learning environme
Slide 33: Educational Domain: Education DX
[Educational Domain: Priority Initiatives] Education DX (1) Establish our competitive advantage in the ‘interactive online’ market, a newly developed market (2) Expand the segments of students and increase retention rates based on a dual approach comprising “real” and “online” Market positioning of
Slide 34: Educational Domain: Toddler Business
[Educational Domain: Strategic Area] Toddler Business Besides delivering learning contents to kindergartens, nursery schools, and homes, increase opportunities for direct exchanges. Deepen our understanding of customers’ day-to-day lives and behaviors to continue providing consistent learning opport
Slide 35: Educational Domain: Recurrent Education Business
[Educational Domain: Strategic Area] Recurrent Education Business “Take on the challenge of developing the largest learning market” Adults 100-year life Recurrent Age 0 to 5 Age 6 to 11 Age 12 to 17 Age 18 to 21 5,638 thousand 6,189 thousand 6,532 thousand 4,733 thousand Age 22 to 64 Age 65 and up 3
Slide 36: Healthcare and Nursing Domain: Basic Policy and Priority Initiatives
[Healthcare and Nursing Domain] Basic Policy and Priority Initiatives “Seek to be a top company contributing to development of sustainable towns” ◉ Improve customer and employee satisfaction ◉ Collaborative creation based on Gakken's Targeted Basic policy Community-based Integrated Care System perfo
Slide 37: Healthcare and Nursing Domain: Expansion of Sites and DX
［Healthcare and Nursing Domain］ Expansion of Sites and DX Apartments for the elderly ◉ Quantitative expansion Serviced apartments for the elderly GH Number of units Expand the number of sites by 7% per annum on average and the number of residence units by over 10%. 800 17127 20,000 Seek to gain a
Slide 38: Healthcare and Nursing Domain: Dementia Care Business
［Healthcare and Nursing Domain］ Dementia Care Business Prevention → Early detection → Prevention → Alleviation and care Mobilize the Group’s resources to address societal issues. Create new businesses in the area of prevention ◉ Develop a business for ▶ Further deepen joint research on early prevent
Slide 39: Group Strategy
Gakken Gakken 2023 Group Strategy
Slide 40: Group Strategy: Acceleration of DX
[Group Strategy] Acceleration of DX ◉ Accelerate the development and implementation of smart education through digitalization, and seek to increase the top line. ◉ Change the operations of healthcare and nursing with digitalization, and seek to increase the bottom line. ◉ Concentrate and share the G
Slide 41: Global Business Development
[Global Strategy] Global Business Development ◉ Share Japan’s experiences with the rest of the world: Contribute to the realization of a society in which “no one will be left behind” by fostering talent. ◉ Share our global experiences with Japan: Leverage our extensive global experience to contribut
Slide 42: Group Management: Four Priority Initiatives
Group Management: Four Priority Initiatives Reinforcement of Group governance and capital cost-conscious management Gakken’s approach to refining business portfolio Management management Implement management with a focus on ROIC based on a four-quadrant framework Organizational Reorganization of the
Slide 43: Approach to Refining Business Portfolio Management
[Group Management] Gakken’s Approach to Refining Business Portfolio Management Business portfolio vision based on the implementation of medium-term strategies Next generation Growth driver Digital Global Healthcare and Nursing Benchmark (Healthcare and nursing) Domain A third pillar Growth criteria
Slide 44: Reorganization of the Group's Business Operation Structure
[Group Management] Reorganization of the Group’s Business Operation Structure Optimize management resource ▶ Integrate touch points with customers and knowledge allocation from a broader perspective and based on broader thinking. ▶ Avoid scatteration of management resources and investment Management
Slide 45: Talent Strategy: Utilization of Human Capital
[Group Management] Talent Strategy: Utilization of Human Capital Gakken Group positions human capital as its most important management resources that create added value needed for achieving sustainable growth. ◉ Pursue provision of fulfilling jobs and comfortable work environment to each and every e
Slide 46: Cash Flow Generation and Capital Efficiency Enhancement
[Group Management] Cash Flow Generation and Capital Efficiency Enhancement Pursue enhanced capital efficiency based on the implementation of management with an awareness of capital costs Realize sustainable growth in profit and shareholder returns based on proactive investment in strategic areas. In
Slide 47: Gakken 2023 Performance Targets
[Gakken 2023] Performance Targets (Billion yen) Net sales 82.0 Performance targets for FY9/23 Education Operating profit 4.5 Operating profit margin 5.5% Net sales: Net sales 76.0 165.0 billion yen Healthcare and Operating profit 3.6 nursing Operating profit margin 4.7% Operating profit: 7.5 billion
Slide 48: Gakken 2023 Financial Indicators and Targets
[Gakken 2023] Financial Indicators and Targets (Billion yen) FY9/20 Outlook for Plan for results FY9/21 FY9/23 Milestones and targets Net sales 143.5 146.0 165.0 - Fiscal year ending September 30, 2025 - Operating profit 5.0 5.6 7.5 ◉ Net sales: 200.0 billion yen Breakdown Operating profit • Educati
Slide 49: Factors Behind Anticipated Changes in Net Sales and Operating Profit
［Gakken 2023］ Factors Behind Changes in Anticipated Increase/Decrease in Net Sales and Operating Profit Over the Next Three Years (Billion yen) [Net sales] +2.0 165.0 +13.0 +1.5 +3.5 143.5 +1.5 FY9/20 result Recovery from the Education DX Elderly care business Child raising support Global Plan for F
Slide 50: Collaborative Creation based on Community-based Integrated Care System
[Vision] Collaborative Creation based on Gakken's Community-based Integrated Care System Towns where people of different age groups—from 0-year-old babies to senior citizens over the age of 100—and their families can continue to live with a sense of security in the same community. Gakken Group contr
Slide 51: MEMO
MEMO © 2020 GAKKEN HOLDINGS CO.,LTD. 51
Slide 52: Supplementary Materials
Gakken Supplementary Materials
Slide 53: Gakken Classroom: Members Enrolled and Certified Classrooms
Gakken Classroom: No. of Members Enrolled in Course Programs and No. of Certified Classrooms <Education Service Business> No. of certified classrooms *2 No. of members enrolled in course programs *1 420,000 16,000 No. of members No. of classrooms 320,000 15,000 September 2017 March 2018 September 20
Slide 54: Cram Schools: No. of Students and Classrooms
Cram Schools: No. of Students and No. of Classrooms <Education Service Business> No. of students No. of classrooms 60,000 600 40,000 400 20,000 200 0 0 September March 2018 September March 2019 September March 2020 September September March 2018 September March 2019 September March 2020 September 20
Slide 55: No. of New Publications and Rate of Publications Returned
No. of New Publications and Rate of Publications Returned <Education Contents Business> No. of new publications Rate of publications returned 45% Note) Gakken Plus excluding periodicals and musical Note) Gakken Plus excluding musical scores scores 1000 38% 38% 38% 750 36% 37% 35% 35% 356 253 35% 35%
Slide 56: No. of Hospitals Contracted for E-learning for Nurses
No. of Hospitals Contracted for E-learning for Nurses <Education Contents Business> 2,000 1,788 1,682 1,482* 1,500 1,403 1,233 1,153 1,006 1,000 848 692 552 500 317 137 7 0 * The figure for September 2019 has been revised from “1,441” due to an error in the aggregation method. © 2020 GAKKEN HOLDINGS
Slide 57: School Textbook Publication Schedule
School Textbook Publication Schedule <Education Solution Business> FY 2015 2016 2017 2018 2019 2020 2021 2022 2023 Elementary Examination △ △ school health Adoption education ● ● Start of use ◎ ◎ Junior high Examination △ △ ● ● school physical Adoption and health education Start of use ◎ ◎ Elementar
Slide 58: No. of Elderly Care and Child Raising Support Facilities
No. of Elderly Care and Child Raising Support Facilities <Healthcare and Nursing Business> Apartments for the elderly, etc. Child raising support facilities (nursery schools, after school children's clubs, etc.) MCS (group homes, etc.) *MCS: FY ended/ing August 500 326 400 312 307 306 300 200 81 72
Slide 59: Facility Occupancy Rate and Utilization Rate
Facility Occupancy Rate and Utilization Rate <Healthcare and Nursing Business> End of End of End of End of March End of September 2018 September 2019 September 2020 2021 September 2021 Results Results Results Plan Plan Total no. of units 3,533 3,628 4,072 4,441 5,041 Greater No. of occupied Tokyo Ar
Slide 60: Financial Strategy Office, Gakken Holdings Co., Ltd.
Financial Strategy Office, Gakken Holdings Co., Ltd. 2-11-8 Nishigotanda, Shinagawa-ku, Tokyo 141-8510 This document contains statements regarding business plans. These statements were prepared based on certain assumptions such as the economic environment and business policies as of the date of prep