The 60th Annual ReportApril 1, 2021 - March 31, 2022
1. Progress and results of business
In this fiscal year the social and economic environment in Japan as well as overseas was strongly affected by the spread of the COVID-19 virus. In addition, there were negative effects from associated factors such as increases in the prices of oil and raw materials as well as economic stagnation caused by the response to the pandemic. In Japan the omicron variant in particular spread widely among the younger generations and caused repeated school and school class closings. This had a major effect on educational activities in the country. Overseas there were a number of countries that implemented lockdowns to prevent the spread of infection. Thus, the trend towards resuming normal social activities and “living with COVID-19” accelerated.
In response to this situation, the Kumon Group will continue from the previous fiscal year to implement the following four basic policies in regard to the COVID-19 pandemic:
- Implementation of measures to ensure that employees, Instructors, and Center assistants do not become infected.
- Strict compliance with the directives of each country and local authority regarding COVID-19 in order to prevent the spread of infection.
- Development and implementation of measures to ensure the continued study of students to the maximum extent possible.
- Placement of our primary focus on the continuation of each and every Center so as to ensure continued operations.
Based on the thorough implementation of these four pillars, the Kumon Group worked to stop the spread of infection, to enable the continuation of study, and to make possible the survival of each and every Kumon Center.
In North America, South America, and Europe and Africa, Center reopenings have steadily recovered with fluctuations depending on infection rates. On the other hand, conditions in Asia and Oceania are still challenging. In China, where most Centers had reopened by the beginning of the fiscal year, a strict lockdown was again imposed. Accordingly, online instruction (an instruction format that allows instructors to provide instruction online without students having to come to Centers) has become an important means for students to continue their Kumon study.
Although the overwhelming majority of families in Japan prefer in-Center study, the number of Centers offering online instruction is steadily increasing in order to serve students who are unable to go to their Kumon Centers.
Thus, in FY2021, we have established a learning framework all over the world based on the premise of living with COVID-19.
In regard to our Center network, COVID-19 has not been a factor leading to an increase in closures. In fact, in some areas, such as North America, we have increased our number of Centers.
In the spring of 2020, the Kumon Group was forced by the pandemic to stop operations at Centers all over the world. Therefore, we have begun to implement Structural Reform 2.0, which is a fundamental reform to transform the Kumon Group into an organization that can respond to changes in business conditions and can develop in a sustainable manner. The company has achieved significant expenditure reductions while improving and maintaining productivity as a result of the integrated promotion of value enhancement for customers, selection and concentration of activities and expenditures, and low-cost operations.
Furthermore, in Japan, we have carried out organizational reforms to create a regional structure. The country has been reorganized into eight regions, and the staffing of key regional branch offices has been increased. We are speeding up professional development, skills transfer, and wisdom generation among staff as well as promoting activities more tailored to local communities while reducing running costs in a unified manner. Online Center support has made progress in response to the pandemic and this is the foundation of the new system.
Thus, based on our 2019-2025 Mid-term Corporate Plan: Innovation 2025, on our domestic business operations policy Future Creation 2025, as well as on the mid-term plans for the operations of each company of the Kumon Group, we will continue to pursue the dramatic improvement in learning outcomes as well as the further penetration into communities in a sustainable model, which are the long-term foundation of the continuation of our business operations with an eye on future changes in society. In addition, we will rapidly adapt to the COVID-19 pandemic and other changing circumstances while moving ahead with the rebuilding and further development of our operations in each region.
As a result, consolidated sales in this fiscal year were 76,343 million yen, an increase of 3,886 million yen compared with the previous fiscal year (year-on-year increase of 5.4%). Operating income was 9,659 million yen (year-on-year increase of 155.0%), ordinary income was 11,875 million yen (year-on-year increase of 192.6%), and the net income attributable to owners of the parent company for the fiscal year was 8,349 million yen (previous year: net loss of 5,036 million yen) resulting in an increase in both sales and income. The increase in operating income was, as stated above, the result of a recovery in sales and the continuation of efforts from FY2020 to reduce expenditures. In addition, the increase in net income attributable to owners of the parent company was due to the fact that the extraordinary loss in the last fiscal year caused by the spread of COVID-19 did not occur in this fiscal year.
As of the end of March 2022, the total number of subject enrollments worldwide was 3.67 million.
Kumon Institute of Education Co., Ltd.