The 57th Annual ReportApril 1, 2018 - March 31, 2019
1. Message from the President
Progress and Results of Business
In this fiscal year the Japanese economy showed a gradual trend towards improvement with a background of rising corporate earnings and amelioration of the employment situation. On the other hand, there were certain factors, including the uncertainty regarding the possible withdrawal of the UK from the EU and the increasing trade friction between the United States and China, that exercised a negative influence on the Japanese economy. Corporations are facing near-term challenges such as the economic effects of the upcoming 2020 summer Olympics in Tokyo and ongoing work reforms. In addition, from a mid-term perspective, an appropriate approach to the period after the 2025 World Exposition in Osaka is required.
In response to these circumstances, the Kumon Group had been working to achieve results in accordance with the Kumon Group 2014-2018 Mid-term Corporate Plan. Based on those results, we will take on the challenges of the next era in line with the Kumon Group 2019-2025 Mid-term Corporate Plan, which was finalized in February of this year and will be referred to below.
In Japan, as a result of the promotion of activities such as those focused on the further improvement of the learning outcomes and value based on our action plan Challenge 2020, we achieved excellent enrollment results primarily in the subject of English, Kokugo (Japanese), and the age group of early learners from the beginning of the fiscal year. In addition, we achieved the highest enrollment conversion rate since 1997 from the May free trial study campaign. Based on these results, and from the long-range viewpoint of ensuring the continuation of our Kumon Center network into the future, tuition fees were raised for the first time in 27 years in order to respond to rising Kumon Center operational costs. As a result, there was a year-on-year drop in enrollment for the month of December 2018 for the first time in 45 months dating back to March of 2015. Nonetheless, enrollment arising from the February 2019 free trial study campaign approached the levels of the previous year and the enrollment conversion rate from the February free trial study campaign was the second highest ever. In addition, the net decrease is on the way to recovery to the levels of the previous year. Based on the Kumon Group 2019-2025 Mid-term Corporate Plan we have begun taking on the challenge of restarting growth for our domestic Center business in accordance with our Future Creation 2025 plan. In this regard, we are carrying out a major reformation of our tasks, organization, and work style while keeping in mind long-term changes in the Japanese society in order to revivify our domestic business by focusing on the keyword “Reborn.”
Concerning our overseas operations, we have taken advantage of knowledge from throughout the Kumon Group and worked to upgrade our activities including consultation and Center setups based on the Kumon Global Challenge 2020 action plan. As a result, enrollment in overseas consolidated subsidiaries has continued to show solid growth. All five of our overseas regional headquarters have shown improvement in average per Center enrollment. Furthermore, record high enrollment has been achieved in 28 of the 51 countries and regions that Kumon operates in (as of March 2019).
As a result, consolidated sales in this fiscal year was 93,011 million yen, a decrease of 147 million yen compared with the previous fiscal year (year-on-year decrease of 0.2%). However, operating income was 13,228 million yen (year-on-year increase of 0.3%), ordinary income was 13,385 million yen (year-on-year increase of 7.3%) and profit attributable to owners of parent company for the fiscal year was 9,615 million yen (year-on-year increase of 43.1%). Thus, there was a decrease in sales but an increase in profit for the fiscal year. The increase in operating income was primarily due to an increase in the profit margin for overseas subsidiaries.
As of the end of March 2019, the total number of subject enrollments worldwide was 4.28 million.
Kumon Institute of Education Co., Ltd.