Presentation for FY February-2012 April 9, 2012 Tokyo Individualized Education Institute(4745)
Corporate Profile as of February 29, 2012 2 (Note) Established : August 1985 Listing : TSE 1st in August 2003 (code;4745) C E O : Kazunari Taniyama Capital : 642.15 million yen Number of schools :197(Kanto 148, Kansai 37, Tokai 7, Kyushu 5) Enrollment : 18,910 students(primary school 2,461 Junior high 9,088 Senior High 7,361) Employees : 402 (Part time teaches included 5,855) Share outstanding : 54,291,435 shares Number of shareholders : 5,154 (as of February 29,2012) Shareholders (as of Feb-29,2012) Shares % 1 Benesse Corporation 33,610,800 61.91% 2 Shinji Baba 7,057,200 13.00% 3 SB asset management 3,315,000 6.11% 4 Ma Ahyou 745,200 1.37% 5 Ma Yarpin 679,400 1.25% 6 Trans Pacific Education Network 270,000 0.50% 7 Nippon trusty service trust B/K (TA) 266,300 0.49% 8 Nippon trusty service trust B/K (TA1) 263,200 0.48% 9 Kyoko Ishihara 250,000 0.46% 10 Isao Ishihara 248,300 0.46% May 31, 2011 TKG s owned 4,576,751shares were fully retired, 7.77% to total outstanding shares. As of February 29,2012 there are 50 shares company owned. Share ratio was calculated except own shares. Individual Others 25.77% Foreign 1.93% BK Insurance 0.15% Trust BK 2.48% Shareholders Based on share # (Feb-2012) Security House 0.57% Other Companies 69.10%
Business Results, FY February-2012 and Forecast for FY February-2013 Director: Shoich Funato
FY Feb-2012: Business Results Summary (million yen) FY Feb-2012 Result FY Feb-2012 Revised Plan Change ± Change % reference FY Feb-2011 Sales 12,572 12,545 26 100.2% Cost of Sales 7,991 8,054 62 99.2% Sales cost ration 63.6% 64.2% Gross Profit 4,580 4,491 89 102.0% Gross Margin 36.4% 35.8% SG & A 4,233 4,164 69 101.7% SG&A ratio 33.7% 33.2% Operating Profit 347 327 19 106.1% OP margin 2.8% 2.6% Recurring Profit 353 331 21 106.5% RP margin 2.8% 2.6% Net Profit 132 184 51 71.9% NP margin 1.1% 1.5% 13,732 8,428 61.4% 5,304 38.6% 4,510 32.8% 793 5.8% 798 5.8% 158 1.2% 4
FY Feb-2012: Business Results Overview Sales Reason for outperforming to plan by 26 million yen (100.2%) 1. Excess of tuition revenue achieved by the strong transition of enrolled students number Operating Profit Reason for outperforming to plan by 19 million yen(106.1%) 1. Due to higher sales than plan 2. By appropriate relocation of instructors, improved instructors costs 3. Continuous cost cutting in each divisions Promoting efficient cost for schools by reforming appropriate transfer and school scale adjusting market (Result in FY:Transfer 17 schools Decreasing scale 1 school increasing scale 3 schools, many school s rent down) Review for posting area and volume of POP/Flyer efficiently 5
Balance Sheet (million yen) FY Feb-2012 (as of Feb29, 2012) FY Feb-2011 (as of Feb28, 2011 ) Current Assets 5,752 6,009 Fixed Assets 2,037 2,120 Total Assets 7,790 8,129 Current Liabilities 1,254 1,353 Fixed Liabilities 19 13 Net Assets 6,515 6,763 Total Liabilities Net Assets 7,790 8,129 Assets Total Assets 7,790 million yen (YOY 339 million yen) Cash was decreased due to the tax and dividend payment Liabilities Total Liabilities 1,274 million yen (YOY 92 million yen) Mainly decreased advanced payment and accounts payable due to decreased students Net Assets Total net assets 6,515 million yen (YOY 274 million yen) Due to dividend payment 6
Cash Flow FY Feb-2012 (March 2011 ~ Feb 2012) (million yen) FY Feb-2011 (March 2010 ~ Feb 2011) Operating CF Earned cash 309 million yen Operating profit covered tax payments etc Operating CF 309 322 Investment CF Cash out 2,144 million yen Investment CF 2,144 2,862 Financial CF 381 1,519 Cash and Cash equivalent balance 3,183 5,399 shifted cash to Time deposit Many schools relocation s cash out for rent deposit and fixed assets even though cash back from previous land owners. Software development Financial CF Cash out Payment for dividends 381 million yen 7
Forecast for FY Feb-2013 Aiming at V-Shaped recovery by recover existing schools & restart new schools open 8 (million yen) S a l e s 12,901 Operating Profit 570 Recurring Profit 572 N e t P r o f i t 337 E P S ( y e n ) 6.21 Assumption for forecast Sales YOY +329 million yen Operating Profit YOY +223 million yen 1. Withdrala rate will continue to improve the quality of favorable customer response 2. Same revel recovery as 2010 by strengthening the sales and consistent system of decision for admittion from advertising 3. Recovery of students number 4. Stable achievement for Spring / Summer / Winter workshop Quality standard development 5. Restart new school open advanced one year from plan
Retirement of own stocks Capital Policy Type of shares to be retied : Company s common stock Number of retired shares: 4,576,751 (7.77% to total outstanding shares) Date of retied : May 31, 2011 Dividends FY Feb-2012 Result 2Q Dividend 3.00 yen 4Q Dividend 3.00 yen (E) Annual Dividend 6.00 yen (E) FY Feb-2013 Forecast 3.00 yen 3.00 yen 6.00 yen (Note)Right Graf :In FY Feb-2011, Commemorative dividend 2 yen as 25 anniversary of company and 10 year since being listed executed in addition to ordinary dividends 6 yen. Annual Dividend / share (yen) 9 8 7 6 5 4 3 2 1 0 31.7% Annual Dividend Payout ratio Commemorative Dividend Ordinaly Dividend Payout ratio 38.2% 280.7% 245.4% Payout ratio (%) 96.6% Feb-09 Feb-10 Feb-11 Feb-12 Feb-2013(E) 300.0% 250.0% 200.0% 150.0% 100.0% 50.0% 0.0% 9
FY Feb-2012 Business overview Director: Katsuki Saitou
Overview of Business Withdrawal ration was improved and new students tend to recover. FY 2012, Response V-shaped recovery is obtained. Strengthen the field Marketing strategies, campaign planning in the development field. Achievements to optimize customer and by region And 3 Division headquarters system from the second half, and an enhanced ability to respond more flexibly according to regional characteristics further. Sales training and management techniques are achieved significant results in the winter sales, which lead to the busy season of spring By strengthening of management and practice in the workshop of spring, summer, winter, lead to completed the committed plan as a stable framework this can be achieved students outcome and greater contribution to the busienss performance. Recent situation In spring workshop achieved outperform to the plan Students number was catched up last year as of end of March, 2012 12 April 9, 2012 Monthly report announced
KPI Result (to previous year) New Students = Recovery Especially Feb-2012 YOY 113.4% New Students YOY 105.6 % 64.4% 87.8% 1Q 2Q 3Q 4Q Mar-2011 99.6 % Feb-2012 Students # = Exceed last year Mar-2012 YOY 101.7% 19,848 Students number 18,766 18,451 Mar-2010 Mar-2011 Mar-2012 Withdrawal ratio=stably Good Achieved result in this 2 year for quality up 2010 2011 Decreased 1,280 students Both new students & Withdrawal ratio achieved higher result compared with 2010 New students (March) Withdrawal ration (March) Annual withdrawal ratio 72.54% 69.02% 66.95% 13 2009 2010 2011
Business strategy President and CEO Kazunari Taniyama
FY Feb-2013 for the V-Shaped Principle 中期成長戦略 Mission Can-Do We foster the individual "can-do", will contribute to the realization of a future full of dreams and spirit of challenge. There is no place that deep understading child and grow up child become the best schools in the region with above feeling. Corporate Slogan More deeply and longer with each student Strategy With high Quality and Value Increasing students Complete order made individual school with Purposes, Academic, Ability difference Bebome individual school that is trusted and chosen customers with enough investment to children for their growth. Recovery on track by efficiency of existing shools quality up Restart new opening schools for expanding 16 Investment for human resource and method for motivation
Competitive Positioning Competitive environment in the three points that we assembled as a concrete policy for recognition of the strengths to expand and improve the quality High Preferred School/Level Low 17 Personal Group Cram School type 3 TKG 1 Individual School 2 Integrated Hybrid Focusing on Purpose Maintenance & repair school Important Consideration Know-how (Technique) 1 With Rival Price Location Service 2 TKG s Battle With Group Cram School High School Entrance Exam Competition 3 With High Level Cram school Competition for University Crammer Quality Recog nition
Targeting Segmentation Planning tactics with a focus on junior high school students and high school enrollment from the current structure (students) Trends in enrollment by April of Elementaly Junior and high (Index: 2009 年 =1.00) High Junior Pass Path Dream realized by TKG to establish Brand 高 小 小 中 High School Enhanced support for university pass Junior High Enhanced support for strengthening admission pass high school 18 Students situation by Segmentation Elementary Junior High Right instruction for each individual
Focusing Strategy for FY Feb-2013 1 2 3 4 5 6 Horizontal expansion of school success pattern 教室成功パターンの横展開 社員の活力向上 Improve Staffs Vitality Redefinition and strengthening of core values コアバリューの再定義と強化 新規教室開校 New Schools Open マーケティング改革 Reform marketing オペレーション改革 Reform Operation higher Operating CONET STYLE Mechanism for Best Practice Standardization school instruct by SV Change Evaluation Improve working field for customer orient Redefinition for TKG s core value Menu development for product line Deepening adoption & development instructors Restart New School Open Change media Massage development Promoting for Recognition Optimal allocation of management resources 19
Focusing strategy 3 Redefinition and strengthening of core values Complete order made individual school with Purposes, Academic, Ability Goal setting Ability Instruction Method Instruction Ability Want to be Want to do drawing power Ability for leading path Order made curriculum connecting now and goal Home study(self study) Checking settlement Ability for deep understading child and grow up child Eleme ntary Junior 20 High Image Menu for product line 1Private junior high school exam 2From elementary school to high school exam 3Overcome weak 4Periodic testing measures 5Entrance exam for public High School 6Private Internal collage progress 7General university entrance exam 8 university AO / Recommendation <<Self study>> Pass Path Dream realized by TKG to establish Brand
Forecast for FY Feb-2013 Accelerate recovery by efficient existing schools performance This FY, especially focuses on new open and human recourse Sales Operating profit FY Feb- 2010 FY Feb- 2011 FY Feb- 2012 FY Feb- 2013 (E) 2014 年 2 月期 2015 年 2 月期 2016 年 2 月期 21 Sales 148.2 137.3 125.7 129.0 Operating Profit 16.2 7.9 3.4 5.7 OP Margin 11.0% 5.8% 2.8% 4.5%
IR Inquiry IR Inquiry Director and General manager of Management Policy Headquarters: Shoichi Funato Management Planning room (Public relations): Yuji Sugimura / Kanako Nakamura TEL:03-5547-3759 e-mail: ir@tkg-jp.com This presentation was prepared to provide information on TKG s FY Feb-2012 results and management strategies. The purpose of these materials is not to solicit investments in TKG s stock or other securities. All information in this presentation is based on data that is current as of end of February, 2012. The company makes no guarantees regarding the accuracy or completeness of this information and retains the right to revise this information at any time with no prior notification. 22
Reference KPI Result (to Plan, to previous year) New Students Withdrawal Ratio Students Number Mar Apr May 6 月 Jul Aug Sep Oct Nov Dec Jan Feb Plan 1,256 1,371 773 1,079 2,563 890 743 782 921 1,242 644 735 Result 985 1,261 696 1,183 3,068 759 789 855 900 1,171 597 909 To Plan% 78% 92% 90% 110% 120% 85% 106% 109% 98% 94% 93% 124% YOY% 54% 67% 81% 99% 120% 77% 85% 88% 90% 99% 85% 113% Plan 13.73% 3.86% 3.70% 2.03% 2.54% 1.94% 2.56% 2.97% 3.70% 4.29% 9.53% 16.61% Rsult 13.46% 2.77% 2.90% 2.37% 2.86% 2.06% 2.61% 2.94% 3.93% 4.50% 8.93% 17.62% To Plan% 98% 72% 78% 117% 113% 106% 102% 99% 106% 105% 94% 106% YOY% 94% 62% 71% 105% 102% 97% 130% 110% 104% 107% 94% 105% Plan 18,667 19,317 19,376 20,061 22,114 22,575 23,013 23,111 23,176 23,424 21,836 18,945 Rsult 18,451 19,201 19,340 20,065 22,560 22,855 23,048 23,225 23,212 23,338 21,850 18,910 To Plan% 99% 99% 100% 100% 102% 101% 100% 100% 100% 100% 100% 100% Difference -216-116 -36 4 446 280 35 114 36-86 14-35 YOY% 93% 92% 93% 93% 96% 95% 94% 94% 93% 93% 94% 94% Difference -1,397-1,631-1,498-1,501-960 -1,153-1,403-1,539-1,623-1,637-1,455-1,273 23 In terms of withdrawal ratio was improved less than 100% in both plan and precious year comparison After September, comparison with revised plan
Reference Students number record: comparison with plan 24,000 103% 23,000 102% S t u d e n t s 22,000 21,000 20,000 19,000 101% 100% 99% 98% T o P l a n 18,000 97% 17,000 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 96% Plan 18,667 19,317 19,376 20,061 22,114 22,575 23,013 23,111 23,176 23,424 21,836 18,945 Resul 18,451 19,201 19,340 20,065 22,560 22,855 23,048 23,225 23,212 23,338 21,850 18,910 % 98.8% 99.4% 99.8% 100.0% 102.0% 101.2% 100.2% 100.5% 100.2% 99.6% 100.1% 99.8% 24 After September, comparison with revised plan
Reference New students record: comparison with plan 3,500 140% 3,000 120% S t u d e n t s 2,500 2,000 1,500 1,000 100% 80% 60% 40% T o P l a n 500 20% 0 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 0% Plan 1,256 1,371 773 1,079 2,563 890 743 782 921 1,242 644 735 Result 985 1,261 696 1,183 3,068 759 789 855 900 1,171 597 909 % 78.4% 92.0% 90.0% 109.6% 119.7% 85.3% 106.2% 109.3% 97.7% 94.3% 92.7% 123.7% 25 After September, comparison with revised plan
Reference Withdrawal ratio record: comparison with plan W i t h d r a w a l R a t i o 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Plan 13.73% 3.86% 3.70% 2.03% 2.54% 1.94% 2.56% 2.97% 3.70% 4.29% 9.53% 16.61% Result 13.46% 2.77% 2.90% 2.37% 2.86% 2.06% 2.61% 2.94% 3.93% 4.50% 8.93% 17.62% % 98.0% 71.8% 78.4% 116.7% 112.6% 106.2% 102.0% 99.0% 106.2% 104.9% 93.7% 106.1% 140% 120% 100% 80% 60% 40% 20% 0% T o P l a n Worse Better 26 After September, comparison with revised plan