New Year Remarks 2021

The following is the outline of the New Year Remarks by Global Sky Group’s Managing Director, Ko Nagata.

A Happy New Year! I trust you all had a wonderful and relax year-end and new year break.

I would like to express my sincere appreciation to all our group officers and employees, and stakeholders, who are working hard to manage our businesses properly, and ensure health and safety under the continued spread of Covid-19.

The year 2021, which is full of uncertainty, has just begun. It is an opportunity for a great reset to recreate a sustainable society and businesses by thinking creatively. We and our corporate group are now truly tested whether we have an “Ability to open up the future” or whether we are able to adapt quickly and flexibly to this drastic social change and the phase of supply-demand adjustment.

Looking back on the 3rd Medium-term Business Plan with 2020 as the final year, Global Sky Group had optimized resource allocation to form a business model based on the group strengths of “creating,” “connecting”, and “cultivating communities”. This has resulted in a creative business model that develops and delivers experience-based solutions for clients such as learning experience and dining experience. Despite some business withdrawals and contractions in our group due to the negative impact of Covid-19, the group sales were maintained at the same level as usual thanks to the strong cash-flow in the early learning business and the sale of non-core assets. Based on the understanding of the necessity for making our experience-based businesses more profitable, I’m talking about the outline of the upcoming five-year plan from 2021 to 25 and the short-term one for this year.

First, our group common challenges and goals during the period of 2021-2025 are below:

1. Pursue sustainability and solve social issues: In consideration of SDGs (Sustainable Development Goals) and ESG (Environment, Society, and Governance), Global Sky Group must carry out business activities in respecting its CLEAR values and will decarbonize and reduce food loss to almost zero by 2025.

2. Maximise corporate value: With our strong commitment to transforming our company on the basis of “QGC” (quality, global standard and creativity) to ensure high levels of customer satisfaction, we aim to build a profitable business and customer base with an operating profit margin of over 15% by 2025, without any negative impacts of unexpected pandemics or natural disasters.

3. Life-long learning and capacity development: Our group officers and employees themselves will become such persons who have a combination of skill sets in global, general, and professional perspectives as we foster future talents.

4. Enhance experience-based values: To distinguish our group amongst global competitors, we put a higher priority on “creativity” at our labs and operations, “connectivity” to gather cutting-edge solutions collectively and reach out to the world, and “communities” to engage customers thorough real experience, and then expand sales online.

Next, I would like to describe the specific initiatives of each business group in 2021.

Global Sky Education Group aims to provide lifelong learning experiences in the environment of real and online, and to be recognised as a leader in Learning Transformation (LX) in communities seeking advanced, global, and personalised education. In the early learning business, we take actions to 1) improve more profitability of existing centres in Australia through the additional upgrade in educational programs and facilities, 2) expand the portfolio including acquisition of new centres, 3) provide centre management services to third parties both in Australia and Japan, and 4) decarbonise or start greening its business process and all facilities. In the learning design business, we take actions to 1) sophisticate lab functions and increase business transactions with educational institutions and companies for training and educational program development, 2) expand the number of students who learn future skills online with ETON X, 3) expand online courses for universities such as global career developments, 4) launch successfully a Digital Transformation (DX) related / STEAM education program with a global brand as planned.

Terra, Ltd., our restaurant operator, will continue to provide dining experiences, but will not hesitate to change its business model in order to survive in the Covid-19 crisis. We take actions to 1) offer the possible highest quality of food and services to pursue higher customer satisfaction, 2) secure off-store cash-flow through creative product development with the strength of enhancing lab functions, and 3) build an online community. The latter two actions are expected to establish a revenue and customer base without depending on restaurant operations. I believe we can regain the brilliance of a community hub.

As I said at the beginning, we are tested “our ability to open up the future”, in other words, “creativity” and “imagination”. I strongly believe that enhancing our creativities at our labs and operations can maintain our business continuity with sustainable earnings and increase its corporate value including good reputations.

Lastly, please keep in mind our group philosophy being to connect the world for a brighter future and always respect its CLEAR values. I would like to close my new year remarks by hoping for an even healthier, safer, and more prosperous year 2021 ahead.