Margin Improvement and Cost Reduction

「For profitability indicators, the Company aims to improve management efficiency while maintaining a consolidated ordinary income margin above 10% and ROE above 15%.」

「Ordinary profit margin 10.5% 10.5% 10.2%」

「We place importance on the ordinary profit margin on sales as a profitability indicator and seek to improve management efficiency with targets of more than 8% over the medium term and more than 10% over the long term. The consolidated ordinary profit margin on sales, which we use as an objective indicator for assessing progress toward management targets, was 9.0%, up 1.1 percentage points from the previous fiscal year as a result of efforts to improve efficiency and control various expenses.」

「Although salary levels were raised at the beginning of the fiscal year, the contribution of ICT use to improved operating efficiency and the postponement of some budgeted advertising and sales promotion expenses intended to attract students in the next fiscal year kept the ratio of total cost of sales and selling, general and administrative expenses to net sales below the level in the same period of the previous year.」

「Although salary levels were raised substantially this spring, further use of ICT to improve operating efficiency restrained the overall increase in personnel expenses. In addition, in consideration of cost-effectiveness, some budgeted advertising and sales promotion expenses were moved to the second half, resulting in the ratio of total cost of sales and selling, general and administrative expenses to net sales remaining below the level in the same period of the previous year.」

「Net sales for the cumulative first quarter of the current consolidated fiscal year were ¥6,249 million, up 7.7% year on year, due to an increase in the number of students enrolled at cram schools and higher tuition fees. As a result, operating loss was ¥240 million, compared with a loss of ¥297 million in the same period of the previous year, ordinary loss was ¥214 million, compared with a loss of ¥287 million, and quarterly net loss attributable to owners of the parent was ¥104 million, compared with a loss of ¥249 million.」

「The consolidated ordinary profit margin on sales, which we use as an objective indicator for assessing progress toward management targets, was 7.9%, up 1.5 percentage points from the previous fiscal year as a result of efforts to control various expenses.」

「As a result, for the cumulative third quarter of the current consolidated fiscal year, net sales were ¥22,379 million, up 7.9% year on year, operating profit was ¥1,643 million, up 31.9%, ordinary profit was ¥1,668 million, up 32.0%, and quarterly net profit attributable to owners of the parent was ¥1,035 million, up 33.8%, reflecting favorable trends in the number of students enrolled at cram schools.」

「Although personnel expenses, raw materials costs, school rent, and other costs increased as the business expanded, cost increases, particularly variable costs, were restrained, keeping both cost of sales and selling, general and administrative expenses below budget.」

「We place importance on the ordinary profit margin on sales as a profitability indicator and seek to improve management efficiency with targets of more than 8% over the medium term and more than 10% over the long term.」

「Although personnel expenses, school rent, raw materials costs, depreciation, and other costs increased due to business expansion and capital investment to improve the learning environment, cost control aimed at improving profit margins reduced the ratios of both cost of sales and selling, general and administrative expenses to net sales overall.」

「Although personnel expenses, school rent, raw materials costs, including purchases of teaching materials and outsourcing expenses, depreciation, and other costs increased as the business expanded, cost control kept the ratios of both cost of sales and selling, general and administrative expenses to net sales below the levels in the same period of the previous year overall. This resulted in greater-than-planned profit margin improvement and significant profit growth.」

「As a result, operating loss was ¥415 million, compared with a loss of ¥688 million in the same period of the previous year, ordinary loss was ¥408 million, compared with a loss of ¥679 million, and quarterly net loss attributable to owners of the parent was ¥317 million, compared with a loss of ¥572 million.」

「The consolidated ordinary profit margin on sales, which we use as an objective indicator for assessing progress toward management targets, was 4.2%, down 0.5 percentage points from the previous fiscal year.」

「As the ordinary profit margin on sales is an important profitability indicator, in formulating this medium-term management plan we set targets of more than 5% over the medium term and more than 10% over the long term, taking into account the impact of the COVID-19 pandemic and other factors.」

「As a result, consolidated results were net sales of ¥11,943 million, down 3.0% year on year, operating profit of ¥332 million, down 57.3%, and ordinary profit of ¥338 million, down 56.3%.」

「As a result, operating loss was ¥688 million, compared with a loss of ¥481 million in the same period of the previous year, and ordinary loss was ¥679 million, compared with a loss of ¥483 million. After recording ¥98 million in fixed costs for the period during which classes were suspended to prevent the spread of COVID-19 as an extraordinary loss, quarterly net loss attributable to owners of the parent was ¥572 million, compared with a loss of ¥372 million in the same period of the previous year.」

「The consolidated ordinary profit margin on sales, which we use as an objective indicator for assessing progress toward management targets, was 4.7%, down 1.8 percentage points from the previous fiscal year.」

「While raising the base salaries and allowances of part-time employees and promoting paid leave utilization, we worked to restrain the rate of increase in personnel expenses through the use of a variable working-hours system and initiatives to improve operating efficiency.」

「Through these initiatives, we were able to restrain the overall rate of increase in personnel expenses while promoting paid leave utilization by employees and raising the base salaries and allowances of part-time employees.」

「The ordinary profit margin on sales, which our group uses as an indicator of improved profitability, was 5.7%, an improvement of 1.3 percentage points year on year.」

「The ordinary profit margin on sales, which our group uses as an indicator of improved profitability, was 5.6%, an improvement of 1.6 percentage points year on year.」

「Our group uses consolidated net sales and consolidated ordinary profit as indicators for assessing progress toward management targets. We also place importance on the ordinary profit margin on sales as a profitability indicator, with targets of more than 8% over the medium term and more than 15% over the long term.」

「Our group uses the achievement levels for consolidated net sales and consolidated ordinary profit set out in the medium-term management plan as indicators for assessing progress toward management targets. We also place importance on the ordinary profit margin on sales as a profitability indicator, and seek to improve management efficiency with targets of more than 8% over the medium term and more than 15% over the long term.」

「To improve management efficiency, we reviewed workflows, mainly for school operations and administrative functions, and certain results have begun to emerge.」

「In addition to promoting reforms to the personnel and compensation systems and development of the next-generation core system, we proceeded with a review of workflows centered on school operating structures and administrative operations to improve management efficiency.」

「At the same time, we worked to improve the efficiency of the school operating structure and review administrative workflows.」

「To improve profit margins, a management priority, we pursued internal projects to reduce costs, seeking to lower outsourcing expenses, office supplies, communications expenses, utility costs, and other expenses, while working to improve budget management.」