Benesse Holdings IR ActivitiesDeveloping and Awareness of Issues through IR
March 21, 2013Katsuhiko Masumoto,
Corporate Communications & Investor Relations DepartmentGroup CSR Promotion Department
Benesse Holdings, Inc.
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Agenda
1. Company Overview- Corporate Philosophy - History and Corporate Data - Review of Operations- Medium-Term ManagementPlan
- Composition of Shareholders- Activity Framework- Main Activities in Fiscal 2012- Main External Evaluations
2. Issues in IR- Communication Gap with
Investors- Inefficient Information
Disclosure- Investor Targeting
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Benesse Group Corporate Philosophy
Benesse’s goal is to help customers to achieve well-being in the following five business fields.
Domestic Education
OverseasEducation Lifestile
Senior/ Nursing
Care
Language/ Global
Leadership Training
History & Corporate Data
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Headquarters: 3-7-17 Minamigata, Kita-ku, Okayama-shi, JapanCapital: 13,600 million yenNumber of Employees: 18,941 (Consolidated)Securities Listings: Tokyo Stock Exchange, Inc., First Section
Osaka Securities Exchange, Co., Ltd., First Section
1955: Founded Fukutake Publishing Co., Ltd. Expanded around School & Teacher Support and CorrespondenceCourse businesses.Achieved a dominant position in the education business in Japan.
1990: Announced "Benesse" as corporate philosophy and brand1995: Company renamed Benesse Corporation.
Transformed from Fukutake Publishing focused on the education fieldinto a provider of diverse people-oriented services.
2009: Benesse Group changes over to holding company system
History
CorporateData
Domestic Education
Lifestyle
Senior/Nursing Care
Language/ Global Leadership Training
Overseas Education
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Review of Operations
KodomoChallenge
ShinkenzemiElementary School Course
Preschool Course in China
Tamago ClubHiyoko Club
Nursing Homes
Berlitz Language Center
Net Sales¥423.7 billion
(FY2011)
Others
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FY2012-16 Mid-term Management Plan
(1) Become the world’s No.1 company in the education field, supporting childcare, education and human resource development globally.
(2) Position the senior/ nursing care business as an important growth fieldand propel growth further.
As a company involved in “Education” and “Solutions for Society’s Challenges
FY2011 FY2016 targets
Net Sales ¥423.7 billion ¥600 billion
Operating income ¥33.7 billion ¥60 billion
ROE 8.7% 12% or higher
<Numerical Targets>
<The Benesse Group’s Growth Vision>
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Shares' % by Shareholders Type
Number of Shares Issued: 102,453,453 sharesNumber of Shareholders: 35,517
[As of September 30, 2012]
Composition of Shareholders
Activity Framework
IR team(5 members)
ExternalCommunications
InternalCommunications
Share management
■ A framework that comprehensively meets multiple needs including IR (Investor Relations), PR (Public Relations), SR (Shareholder Relations), ER (Employee Relations), and CSR (Corporate Social Responsibility)Corporate Communication: Increasing “Corporate Value” through stable relationships with society
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Corporate Communications & Investor Relations Department
Group CSR Promotion Dept.
Brands
Executive Vice President and CFO
President
Concurrent Department Manager
Communication with Shareholders and
Investors
Internal FeedbackIR Tools
Main Activities in Fiscal 2012
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- Results briefings, small meeting(2 each year)
- Presentations and visits(Approx. 300 per year, of which 120 overseas)
- Visits to overseas investors (4 each year)London, Switzerland, Germany, New York, Chicago, Toronto, Singapore, Hong Kong
- General Meeting of Shareholders- Seminars for retail investors (5 each year)
- Annual Report- Fact Book- Shareholder Newsletter- IR Website- Corporate Website, etc.
- IR Activity Report (for Management) - Share Price Report (Daily) * Currently suspended
- Report on activities through the company newsletter and intranet
- Links with Employee Shareholders’ Association
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Main External EvaluationsRecord of Major Awards Received
Nikkei Annual Report Awards: Prize winner for 10 consecutive years, Grand Prize (2009), Special Award for Digest version (2010)
International ARC Awards: Gold Award (2010, 2011)
Nikko Investor Relations Co., Ltd. ranking of all listed companies in Japan: Best Corporate Website Award for eight consecutive years, (overall ranking:10th)
Daiwa Investor Relations Co., Ltd.: Internet IR Excellence Award (first time), Special Award (first time)
Gomez IR Site Ranking: Best Company for 5 consecutive years, (Overall ranking: 12th)
iNOVA Awards: Investor/Shareholder Relations Gold Award (2008), Silver Award (2009, 2010), Corporate Website Category (Education) Bronze (2012)
Tokyo Stock Exchange Disclosure Award: 2005, 2010
Japan Investor Relations Association (JIRA) IR Grand Prix Award (2005)
Issues in IR
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Communication Gap with Investors
Inefficient Information Disclosure
Investor Targeting
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Increase corporate value
【 Investors 】【 Management 】
- Quarterly financial results- Precision of earnings
forecasts- Flash reports prior to
annual and quarterly results- Dividends and share
buybacks- Governance- ROE
- Medium- to long-termstrategy
- Knowledge offundamental strengths
- Management’s thinking- Business Investments/M&A - Good
relationship over the medium- to long-term
- Increase corporate value
Management and investors share common goals for the company, but they do not share the same information.
< Goals >
Communication Gap with Investors
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Is disclosure in Japan behind the times?
Japan US Germany UK France
Reporting frequency Quarterly Quarterly Quarterly Semi-annually Semi-annually
Reporting deadline
Within 45 days
40 or 45 days depending on company size
Within 2 months
Within 2 months
Within 2 months
Audit (Review) required Yes Yes Yes No Yes
■ International Comparison of Quarterly Financial Report Systems
- In Europe financial reporting need not be done on a quarterly basis, and when it is doneonly a qualitative and limited disclosure is required.
- In Japan there is a trend towards simplifying quarterly reporting, but compared toEurope and the US the reports have to be made in a shorter time, and arerequired to include more information.
Disclosure of Quarterly Financial Results
6 times/ year, 6.7% 5 times/
year, 11.1%
4 times/ year, 17.8%
3 times/ year, 20.0%
2 times/ year,
14.4%
1 time/ year, 30.0%
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*Breakdown of information-gathering sessions at Benesse Holdings (Apr. 2012 – Feb. 2013) One-on-one meetings only (Incl. overseas IR activities and by telephone)
4 times/ year, 0.8%
3 times/ year 0.8%
2 times/ year, 9.2%
1 time/ year, 89.2%
< Japanese Investors > < Overseas Investors >
The majority gather information at least 3 timesper year; 36% do so 4 times a year or more.
High Frequency of Information-gathering among Japanese Investors
- Gather information 1-2 times per year.- No investors seek to gather information every quarter.
(From a questionnaire conducted during overseas IR activities in Nov. 2012)
Disclosure of Quarterly Financial Results
Different Disclosure Materials for Each Standard
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Annual and Quarterly Securities
Reports
Quarterly Financial Report
Business Report (Calculation documents)
Annual Report (English Financial
Statements)
Standard Financial Instruments and Exchange Act
Securities exchange listing rules Companies Act Optional
Auditor’s Report ○ ― ○ ○
ContentNo earnings forecastsNon-consolidated results included
Earnings forecast includedCF and Segment data optionalNon-essential notes may be omitted
No earnings forecastsNon-consolidated results included
Rearrange and adjust the consolidated financial statements for overseas standard
Rounding of figures
Rounded down to nearest unit
Rounded down to nearest unit
Rounded down to nearest unit
Rounded up or down to the nearest unit
Significant burden on companies -> Possible to unify and simplify reporting standards?
■ Main Financial Reporting Documents
Inefficient Information Disclosure
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Are Japan’s disclosure materials becoming too different from the mainstream?
Clear third-party evaluation standards -> Improvement in overall level. However, this also encourages follow-the-leader mentality.
60
70
80
90
100
110
120
130
140
2006 2007 2008 2009 2010 2011 2012
< Number of Pages in Benesse Holdings’ Annual Report >
Increase in content has increased page content each year.
< Overseas Corporate IR Websites >
Overseas corporate IR websites display strong individual character.
Inefficient Information Disclosure
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↑OverweightMarket Neutral
↓Underweight
Is there scope for additional investment?
Majority of major Japanese investors are significantly over-weighted relative to stock index compositions
13 companies The top two ranking investment firms have especially large holdings.
84 companies
High proportion of growth fund investors-> Sensitivity to movements of retail investors
< Shareholding by Japanese Investors > < Shareholding by Overseas Investors(by Investment Stance) >
Overseas Investors are Becoming More Important
Total amount of investment
Investor Targeting
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Shift to Investor Targeting
Investors move quickly, so data is not always current Investors cannot be grouped together by affiliation,
investment stance, or regionHave we truly ascertained investors’ needs?
Information Sources- Securities companies- Shareholder identification
surveys- IR support companies
Decision Points- Shareholder/non-shareholder- Number of shares and duration of holding
- Affiliation, investment stance- Asset scale- Other investments held
×
Issues
Investor Targeting
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How will IR respond to SRI, which is growing more important?
SRI Index or Fund Rating OrganizationDJSI World SAM (Switzerland)FTSE4Good EIRIS (UK)
Global Challenge Index Oekom research (Germany)Hanover stock exchange
ASN Sustainable Equity Fund ASN Bank Selection CommitteeNatural Environment Protection Fund (Oze Kiko) IntegrexSRI Japan Open (Good Company Fund) The Japan Research InstituteSocially Responsible Investment Fund (SRIPlan) Integrex
Japan Stock SRI Fund The Japan Research InstituteMitsubishi UFJ SRI Fund (Family Friendly Fund) The Good BankersSompo Japan Eco Open NKSJ Risk ManagementSompo Japan SRI Open-Mirai no Chikara NKSJ Risk Management, IntegrexSompo Japan Green Open-Bunanomori NKSJ Risk ManagementDaiwa SRI Fund Integrex
< Main Indexes and Funds that Include Benesse Holdings as a Component >
Investor Targeting