Education Business Risk from Declining Birth Rates, Intensifying Competition and Lower Prices
First written in FY2019. 12 of 19 entries say "Worsened", first in FY2020-Q1. Latest entry: FY2025-H1.
Life Intelligent Enterprise Holdings moved to the "Worse" side of this theme in 2019, 6 years before the typical company in this theme (2025).
0 other companies' latest entry also says "Worsened".
- FY2025-H1WorsenedAnnual report
「Going forward, we will scale back operations in fields where profitability is not expected and pursue a structure capable of generating profit through rigorous cost management.」
In response to the difficult outlook, lower sales and larger losses, the company identifies scaling back fields with no expected profitability as a measure. - FY2024-Q3WorsenedAnnual report
「Amid a difficult outlook for the education-related business because of higher raw-material costs, we focused on streaming winter-course lectures, but this did not generate sales contributions commensurate with production costs. Sales of educational materials, in-school tests and cram-school tests also fell below the previous year, causing the operating loss to widen. As a result, sales were ¥1,129 million, down 2.7% year on year, and segment loss, or operating loss, was ¥592 million, compared with ¥135 million in the previous year.」
Higher raw-material costs and insufficient sales contributions from video streaming continued. Sales declined 2.7% and segment loss widened from ¥135 million to ¥592 million. - FY2024-Q2WorsenedAnnual report
「Amid a difficult outlook for the education-related business because of higher raw-material costs, we focused on streaming course lectures, but this did not generate sales contributions commensurate with production costs. Sales of educational materials, in-school tests and cram-school tests also fell below the previous year, causing the operating loss to widen.」
Higher raw-material costs, insufficient sales contributions from video streaming and lower educational-material and test sales caused segment loss to widen to ¥263 million. - FY2024-Q1WorsenedAnnual report
「Although school activities were moving toward normalization, the education-related business remained difficult to forecast because of higher raw-material costs. We continued reviewing product costs and selling, general and administrative expenses. Sales of educational materials increased, but test sales fell below the previous year because the timing and number of in-school tests changed as student numbers declined and the school-term system changed, causing the operating loss to widen. As a result, sales were ¥325 million, up 1.5% year on year, and segment loss, or operating loss, was ¥135 million, compared with ¥60 million in the previous year.」
Although school activity was normalizing, higher raw-material costs, fewer students and changes in the school-term system reduced test sales. Segment loss widened from ¥60 million to ¥135 million. - FY2023WorsenedAnnual report
「Amid a difficult outlook for the education-related business because of the prolonged impact of COVID-19 and higher procurement prices, we continued to expand educational materials, including follow-up materials for learning-assessment products and in-school tests, as a core sales-promotion measure, and continued reviewing product costs and selling, general and administrative expenses. However, both sales and profit were below the previous year.」
The company expanded educational materials and reviewed costs amid continued COVID-19 and higher procurement prices, but sales and profit remained below the previous year and segment loss was ¥183 million. - FY2023-Q3WorsenedAnnual report
「Against a difficult outlook for the education-related business because of the prolonged impact of COVID-19, we continued to review product costs and selling, general and administrative expenses, but both sales and profit were below the previous year. As a result, sales were ¥1,160 million, down 10.6% year on year, and segment loss, or operating loss, was ¥135 million, compared with ¥28 million in the previous year.」
The company continued reviewing costs, but sales declined 10.6% and segment loss widened to ¥135 million from ¥28 million. - FY2023-Q2WorsenedAnnual report
「Against a difficult outlook for the education-related business because of the prolonged impact of COVID-19, we continued to review product costs and selling, general and administrative expenses, but both sales and profit were below the previous year. As a result, sales were ¥724 million, down 10.9% year on year, and segment loss, or operating loss, was ¥99 million, compared with ¥50 million in the previous year.」
The company continued reviewing costs amid a difficult outlook caused by prolonged COVID-19. Sales declined 10.9% and segment loss widened from ¥50 million to ¥99 million. - FY2023-Q1WorsenedAnnual report
「Against a difficult outlook for the education-related business because of the prolonged impact of COVID-19, we continued to review product costs and selling, general and administrative expenses, but both sales and profit were below the previous year.」
The difficult outlook caused by prolonged COVID-19 continued. The company reviewed costs, but sales declined 17.3% year on year and segment loss widened from ¥34 million to ¥60 million. - FY2022-Q3MitigatedAnnual report
「Against a difficult outlook for the education-related business because of the prolonged spread of COVID-19, including the inability to hold most venue-based tests, both sales and profit declined. Venue-based testing is expected to resume from March 2022 onward and contribute to sales and profit from the next fiscal year onward.」
The inability to hold most venue-based tests continued to reduce sales and profit, but the company expected testing to resume from March 2022 and partially ease the prolonged impact. - FY2022-Q2WorsenedAnnual report
「Against a difficult outlook for the education-related business because of the prolonged spread of COVID-19, including the inability to hold venue-based tests, both sales and profit declined.」
In addition to declining birth rates and intensifying competition, prolonged COVID-19 prevented venue-based tests from being held. Sales declined 4.9% year on year and segment loss was ¥50 million. - FY2021RestatedAnnual report
「During the state of emergency from April to May 2020 caused by the spread of COVID-19, schools were closed, and sales other than school-related supplementary materials were nonexistent. After the state of emergency and school closures were lifted in June 2020, school-related and cram-school-related sales gradually began to recover, and sales from July to September 2020 exceeded the previous fiscal year.」
The company continues to describe the disappearance of sales due to school closures and the recovery after restrictions were lifted, in addition to the structural education-business environment. - FY2021-Q3RestatedAnnual report
「After the state of emergency and school closures were lifted in June, school-related and cram-school-related sales gradually began to recover, and sales from July to September exceeded the previous fiscal year.」
The company continues to report recovery in school- and cram-school-related sales after school closures were lifted. However, cumulative education-related sales remained down 21.3% year on year. - FY2021-Q2MitigatedAnnual report
「After the state of emergency and school closures were lifted in June, school-related and cram-school-related sales gradually began to recover, and sales from July to September exceeded the previous fiscal year.」
Following the lifting of school closures, school- and cram-school-related sales gradually recovered, and sales from July to September exceeded the previous year. The impact had eased but was not stated to have been eliminated; cumulative sales were down 26.4% year on year. - FY2021-Q1MaterialisedAnnual report
「During the state of emergency from April to May 2020 caused by the spread of COVID-19, schools were closed, and sales other than school-related supplementary materials were nonexistent.」
In addition to structural risks such as declining birth rates and intensifying competition, school closures due to COVID-19 actually eliminated sales other than school-related supplementary materials. - FY2020WorsenedAnnual report
「The environment remains difficult overall because declining birth rates have intensified competition with rival companies, while testing demand at the growing number of integrated middle and high schools is shifting toward major testing companies that cover both high-school and university entrance examinations,」
Declining birth rates, intensifying competition and the shift of integrated-school demand to major providers continued, and segment loss widened to ¥563 million. - FY2020-Q3RestatedAnnual report
「The environment remains difficult overall because declining birth rates have intensified competition with rival companies, while testing demand at the growing number of integrated middle and high schools is shifting toward major testing companies that cover both high-school and university entrance examinations,」
The company continues to describe declining birth rates, intensifying competition and the shift in demand toward major providers as a difficult education-business environment. Segment loss was ¥468 million. - FY2020-Q2WorsenedAnnual report
「The environment remains difficult overall because declining birth rates have intensified competition with rival companies, while testing demand at the growing number of integrated middle and high schools is shifting toward major testing companies that cover both high-school and university entrance examinations,」
The market shift toward major providers, together with declining birth rates and intensifying competition, continued. Segment loss widened to ¥485 million. - FY2020-Q1WorsenedAnnual report
「The environment remains difficult overall because declining birth rates have intensified competition with rival companies, while testing demand at the growing number of integrated middle and high schools is shifting toward major testing companies that cover both high-school and university entrance examinations.」
In addition to declining birth rates and intensifying competition, the company newly identifies a market shift in which testing demand from integrated middle and high schools is moving to major providers. Sales and profit were below the previous year, and segment loss was ¥31 million. - FY2019First statedAnnual report
「The high-school entrance-examination market continues to contract over the long term because of declining birth rates, while competition with rival companies remains intense. We therefore continue fundamental structural reform to control product costs and selling, general and administrative expenses through greater operating efficiency. In the core academic-testing division, in addition to revenue declines from natural decreases in students, competitors have begun lowering actual prices to compete for students in the group’s strong regions, further weakening performance.」
The company identifies the long-term contraction of the high-school entrance-examination market due to declining birth rates, intensifying competition and competitors’ price reductions as operating-environment risks causing lower sales and weaker performance.