Global Kids : Presentation Materials for the Earnings Briefing for the First Half of the Fiscal Year Ending September 30, 2021

Consolidated Financial Results

for the Second Quarter of the Fiscal Year Ending September 30, 2021

(Six Months Ended March 31, 2021)

		[Japanese GAAP]
		May 14, 2021
Company name:	Global Kids Company Corp.	Stock Exchange Listing: TSE (1st section)
Securities code:	6189	URL: https://www.gkids.jp/
Representative:	Yuichi Nakasho, Representative Director & CEO
Contact:	Masayuki Noda, General Manager, Finance & Investor Relations Department
	Telephone: [phone]
Scheduled date of filing of Quarterly Report:	May 14, 2021
Scheduled date of payment of dividend:	-
Preparation of supplementary materials for quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes (for institutional investors and analysts)
	(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending September 30, 2021 (October 1, 2020 to March 31, 2021)

(1) Consolidated results of operations			(Percentages represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
Six months ended Mar. 31, 2021	11,640	6.0	336	71.5	324	34.4	196	33.3
Six months ended Mar. 31, 2020	10,977	18.2	195	(21.0)	241	3.3	147	4.3

Note: Comprehensive income (million yen)	Six months ended Mar. 31, 2021: 209 (up 31.8%)
		Six months ended Mar. 31, 2020: 159 (up 5.6%)
	Net income per share	Diluted net income
	per share
		Yen	Yen
Six months ended Mar. 31, 2021		21.28	20.93
Six months ended Mar. 31, 2020		16.09	15.72

(2) Consolidated financial position

	Total assets		Net assets		Equity ratio
	Million yen		Million yen		%
As of Mar. 31, 2021	21,443			8,373		39.0
As of Sep. 30, 2020	18,561			8,146		43.8
Reference: Shareholders' equity (million yen) As of Mar. 31, 2021: 8,353		As of Sep. 30, 2020:	8,127

2. Dividends

				Dividend per share
	1Q-end	2Q-end	3Q-end		Year-end	Total
	Yen	Yen	Yen		Yen	Yen
Fiscal year ended Sep. 30, 2020	-		0.00	-		0.00	0.00
Fiscal year ending Sep. 30, 2021	-		0.00
Fiscal year ending Sep. 30, 2021 (Forecast)				-		0.00	0.00

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Earnings Forecast for the Fiscal Year Ending September 30, 2021

(October 1, 2020 to September 30, 2021)				(Percentages represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per share
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	23,800	7.4	700	46.6	1,260	37.5	680	55.2	73.68

Note: Revisions to the most recently announced earnings forecast: None

*Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Application of special accounting methods for presenting quarterly consolidated financial statements: None
3. Changes in accounting policies and accounting-based estimates, and restatements
4. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
5. Number of shares issued (common stock)
6. 1. Number of shares issued as of the end of the period (including treasury shares)

As of Mar. 31, 2021:

9,276,511 shares

As of Sep. 30, 2020:

9,229,880 shares

2) Number of treasury shares as of the end of the period

As of Mar. 31, 2021:

3,621 shares

As of Sep. 30, 2020:

1,072 shares

3) Average number of shares issued during the period

Six months ended Mar. 31, 2021:

9,251,776 shares

Six months ended Mar. 31, 2020:

9,175,917 shares

• The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts and other special items
  Forecasts and other forward-looking statements in these materials are based on assumptions judged to be valid and information available to the Company's management at the time these materials were prepared, but are not promises by the Company regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons.
  Please refer to the section "1. Qualitative Information on Quarterly Consolidated Financial Performance, (4) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements" on page 3 of the attachments for details on the above forecasts.

Global Kids Company Corp. (6189) Consolidated Financial Results for the Second Quarter of FY9/21

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Cash Flows	3
(4)	Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements	3
2. Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
	(For the Six-month Period)
(3)	Quarterly Consolidated Statement of Cash Flows	7
(4)	Notes to Quarterly Consolidated Financial Statements	8
	Going Concern Assumption	8
	Significant Changes in Shareholders' Equity	8
	Segment and Other Information	8

1

Global Kids Company Corp. (6189) Consolidated Financial Results for the Second Quarter of FY9/21

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

During the first six months of the fiscal year ending September 30, 2021 (hereinafter, "the period under review"), while the situation in the Japanese economy continues to be severe due to the impact of the novel coronavirus infection, there have been signs of recovery, including a partial recovery in corporate earnings. However, with no prospects of an end to the pandemic, including the third declaration of a state of emergency in April 2021, the outlook is becoming increasingly uncertain.

As for the child-rearing support business in this economic environment above, a change in awareness of the social advancement of women and government efforts to encourage them to take active roles have helped to maintain high levels in the number of double- income households and the employment rate of women. Accordingly, demand for childcare services has remained at a high level. In the period under review, despite the second declaration of a state of emergency in January 2021, the attendance rate for nursery school children remained generally unchanged, and the impact of the novel coronavirus infection was minor.

In response to this increase in demand for childcare services, both the central and local governments are implementing measures to secure childcare workers and develop nursery schools to expand service capacity. Specifically, free early childhood education and preschool programs began in October 2019, and in December 2020, the government announced the New Child-rearing Security Plan, setting a goal of securing additional capacity for approximately 140,000 children over the four years from fiscal 2021 to the end of fiscal 2024.

Due to these measures undertaken by the government, demand for establishing new nursery schools is expected to continue for the time being, which reflects a continued growth in demand for childcare services in central Tokyo, where we have focused our efforts. Given the concern over Japan's declining workforce due to its aging population and a decrease in its total population, the development of a sound child-rearing environment and improvement of the quality of childcare services are issues to be addressed in the course of promoting the social advancement of women to boost the country's economic vitality. In this context, the child-rearing support service providers are playing an increasingly important social role.

At the end of the period under review, the Group operates a total of 176 facilities: 125 central government licensed nursery schools (91 in Tokyo, 25 in Kanagawa, three in Chiba, one in Saitama and five in Osaka); 23 local government licensed nursery schools or centers for early childhood education and care; 11 employer-sponsored nurseries; 13 after-school day care centers or children's houses; and four child developmental support facilities.

Meanwhile, we arranged to open new facilities during the period under review, and opened nine central government licensed nursery schools on April 1, 2021, as listed below. In addition, we are planning to open one central government licensed nursery school in September.

(Central government licensed nursery schools) Tokyo

Global Kids Ikegami Global Kids Kamata No. 2 Global Kids Magome

Global Kids Morishita 5-Chome Global Kids Hirano

Global Kids Shimo No. 2 Kanagawa

Global Kids Mitsukyo

Global Kids Hiyoshi 5-Chome

Chiba

Global Kids Urayasu

Net sales for the period under review increased attributable to a rise in the number of nursery school children mainly due to an increase in the number of facilities under operation. In addition, the cost to sales and selling, general and administrative expenses ratios improved due to the promotion of online internal events and training, as well as enhanced efficiency in hiring childcare workers. Consequently, the Group reported net sales for the period under review of 11,640 million yen (up 6.0% year on year) with operating profit of 336 million yen (up 71.5% year on year), ordinary profit of 324 million yen (up 34.4% year on year), and profit attributable to owners of parent of 196 million yen (up 33.3% year on year).

2

Global Kids Company Corp. (6189) Consolidated Financial Results for the Second Quarter of FY9/21

1. Explanation of Financial Position Assets
   Total assets amounted to 21,443 million yen at the end of the period under review, an increase of 2,882 million yen from the end of the previous fiscal year.
   Current assets increased 2,696 million yen to 6,890 million yen. This was mainly attributable to an increase of 2,530 million yen in cash and deposits.
   Non-current assets increased 185 million yen to 14,552 million yen. This was mainly attributable to an increase of 565 million yen in construction in progress, in preparation for the opening of new facilities in April, while buildings and structures, net decreased by 330 million.

Liabilities

Total liabilities amounted to 13,070 million yen at the end of the period under review, an increase of 2,656 million yen from the end of the previous fiscal year.

Current liabilities increased by 2,995 million yen to 6,462 million yen. This was mainly attributable to an increase of 3,100 million yen in short-term loans payable.

Non-current liabilities decreased 339 million yen to 6,608 million yen. This was mainly attributable to a decrease of 347 million yen in long-term loans payable.

Net assets

Net assets amounted to 8,373 million yen at the end of the period under review, an increase of 226 million yen from the end of the previous fiscal year. This was mainly attributable to an increase of 196 million yen in retained earnings as a result of the booking of profit attributable to owners of parent.

(4) Cash Flows

Cash and cash equivalents (hereinafter, "net cash") at the end of the period under review amounted to 4,347 million yen.

Cash flows from operating activities

Net cash provided by operating activities amounted to 487 million yen (921 million yen provided in the first half of the fiscal year ended September 30, 2020), mainly due to deprecation of 416 million yen and profit before income taxes of 324 million yen, despite income taxes paid of 344 million yen.

Net cash provided decreased 433 million yen compared with the first half of the fiscal year ended September 30, 2020. This was mainly due to an increase in income taxes paid of 279 million yen.

Cash flows from investing activities

Net cash used in investing activities amounted to 657 million yen (797 million yen used in the first half of the fiscal year ended September 30, 2020), mainly due to purchase of property, plant and equipment of 604 million for the opening of new nursery schools. Net cash provided increased by 140 million yen compared with the first half of the fiscal year ended September 30, 2020. This was mainly due to a decrease in purchase of property, plant and equipment of 89 million yen, a decrease in purchase of intangible assets of 19 million yen, and a decrease in payments for lease and guarantee deposits of 19 million yen.

Cash flows from financing activities

Net cash provided by financing activities amounted to 2,700 million yen (2,695 million yen provided in the first half of the fiscal year ended September 30, 2020), mainly due to an increase of 3,100 million yen in short-term loans payable, despite repayments of long- term loans payable of 447 million yen.

Net cash provided stayed at around the same level as in the first half of the fiscal year ended September 30, 2020, with an increase of 5 million yen.

(4) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements

The Company maintains its consolidated forecasts for the fiscal year ending September 30, 2021 that was announced on November 12, 2020.

3