Financial Results for the 2Q of
Fiscal Year Ending January 31, 2022
SILVER LIFE Co., Ltd.
The First Section of the Tokyo Stock Exchange (9262)

Summary of the 2Q Results andWhole Financial Year Forecast-2-

FY2022 2Q Financial Results（Millions of yen）
FY2022 2Q
YoY
Changes

FY2021 2Q

Composition

Ratio

Comparedwith
Forecast

YoY
ChangesComposition

Ratio

FY2022
Forecast

Sales

5,450 11.5% 100.0%

46.5%

4,888

16.1% 100.0%

11,720Gross
Profit1,382 ▲5.3%

25.4%

46.3%

1,459

19.1%

29.9%

2,980

Operating
Profit312 ▲49.0%

5.7%

56.7%

611

48.6%

12.5%

550

Ordinary
Profit382 ▲43.1%

7.0%

56.1%

671

38.2%

13.7%

680

Profit254 ▲39.0%

4.7%

59.2%

417

38.3%

8.5%

430

Losses and percentage change in net sales, operating income, and ordinary income are for reference purposes only.
Actual results for the fiscal year ended July 31, 2022 are after the application of the revenue recognition accounting
standard, and the aforementioned three items have decreased by approximately 5 million each-3-

Sales per Category: Franchise Chains

FranchisechainsSales 3,988 million yen （YoY +13.1%）
Stores ： 948 （ compared to the previous year-end +14）
3rd Chain “Takusyoku Life” Started recruiting FC chain members.
Existing stores sales YoY (Open 13 months past)“”Magokoro Bento”+14.1％、”Haishokuno Fureai” +27.6％（Millions of yen）
8,000
7,000

6,000
5,000
4,000
3,000
2,000
1,000
0
2018/7期

2019/7期

2020/7期

2021/7期

2022/7期-4-Sales per Category: Facilities for the Elderly, etc.

Sales 633 million yen （YoY +5.4)
Facilities for theelderly

Cilled：YoY ▲9.1%
Suspension of new sales activities due to low service and low order rates
Frozen：YoY＋104.8%
Sales are in full swing, and since 2Q, the impact of COVID19 has faded
and facility visits are now allowed.
Sales ratio within this category reached 25%.

（Millions of yen）
1,400

1,200

1,000

800

600

400

200

0
2018/7期

2019/7期

2020/7期

2021/7期

2022/7期-5-Sales per Category: Direct sales / Others

Sales 827 million yen （YoY +8.8%）
Direct Sales /OthersDirect sales ：YoY＋30.4%
Resume advertising activities in September 2021.
Increase in rental freezer users (regular set orders)
Expanding the number of stores that can handle package drop service
OEM ：YoY ▲18.3%
Continued decline in contract volume from existing large customers
New customers are being developed steadily, and sales are expected toincrease from 3Q.

（Millions of yen）
1,800

1,600
1,400
1,200

1,000
800
600
400
200
0
2018/7期

2019/7期

2020/7期

2021/7期

2022/7期-6-Number of Stores
11 "Magokoro Bento" stores increased and 11 " Haishoku no Fureai" stores decrease“Takusyoku-Life” inceased (compared to the previous year-end). 948 stores in total (as of theend of Jan. 2022) 2Q saw a decrease in store openings and a concentration of postponements
compared to previous years (for various reasons, no trend) Favorable acquisition of franchisecontracts; 120 stores currently under preparation, compared to 60-70 in the past; expected tobe resolved in the second half of the year
（number of stores）

Increase in the Number of Stores

1000

14

900
800
700

553

564

299

500
400

14

85

138

196

245

300
200
100

1

15

88

173

240

Takusyoku Life
※

370

338

600

0

381

332

363

352

356

Haishokuno Fureai

367

381

430

496

Magokoro Bento

1. "Rakuraku Bento" is not included in the above number of stores since it will only be a store opened alongside a member store.
2. Since store sales start from zero and gradually increase after the opening, contribution to sales will be from the next year after
the store opens.

-7-

Analysis of Sales Figures（Millions of yen）

440

21
FC Loyalties,
etc.

67

32
Facilities for the
Elderly

5,450

Direct sales/ Others

4,888
FC Food Sales

561 million yen increase
FY2021
２Q

FY2022２Q-8-

Analysis of Ordinary Profit Figures（Millions of yen）

671

21

-99

FC
Loyalties,
etc.

Please refer to P10 “Analysis of Gross Profit Figures”-110

Please refer to P11 “Analysis of Advertising expenses”

Food Sales
Profit-31
Advertising
Expenses-12

Fare
Payment
Charges-11
Personal
Costs

-46
382
Others289 million yen decrease
FY2021
2Q

FY20222Q-9-

【Supplement】Analysis of Gross Profit Figures
Increases in depreciation and labor costs put pressure on gross profit.
【Depreciation】2 Factories 236mil. yen（PY 48mil. yen）
【Labor cost】 2 Factories 340mil. yen（PY 272mil. yen）
Production efficiency gradually becomes more pronounced (see p. 15 & 16)

561

-320

（Millions of yen）
Tochigi Factory
Real estate tax24 mil. yen-188
Merchandise

1,459
Sales
increase

-68

-34

-26
Depreciation
-19
18
Labor
cost
and
Utilities Taxes and Cost of
Othersamortization
charge public dues materials

1,382

77 million yen decrease
FY2021
2Q

FY20222Q- 10 -

【Supplement】Increase in advertising expenses
Significantly increased from the same period last year
98 million yen → 208 million yen※From August for Franchise chains and Facilities for the elderly,
and from September for Direct Sales
Direct sales advertising expenses +57 million yen 【FY2021
2Q】Adjustment of ad input so as not to exceed
production capacity【FY2022 2Q】Massive drop from September due tocorona outbreak in August.
Steadily acquired regular customers
Direct sales
advertisingexpenses

Franchise chains advertising expenses +54 million yen
1Q：Increased advertising to food service consumers ona trial basis.
→ Suspended due to poor cost-effectiveness
2Q：Expanded franchisee development advertising,increased contract wins (but the pace of new store
openings slowed, leading to an increase in the numberof stores being prepared to open)

Facilities for theelderly advertisingexpenses
Franchise chainsadvertisingexpenses

FY2021
2Q

FY20222Q- 11 -

FY2022 Forecast(Millions of yen)

FY2022 Forecast

Sales

Gross
ProfitOperating
ProfitOrdinary
ProfitProfitYoY
Changes

FY2021 Results

YoY
Changes

11,72016.7%

10,050

13.8%

2,980

9.5%

2,720

4.2%

550

-34.5%

839-10.1%

680-30.1%

973-10.4%

430-21.3%

546-19.5%

・Sales are expected to grow steadily.
・Gross profit increased slightly, while depreciation, labor cost, material cost, utilities cost, etc. increased due to operation of
Tochigi Factory.
・SG&A expenses increased significantly; advertising expenses increased due to aggressive sales promotion, anddepreciation expenses were incurred when the warehouse became operational in March 2022.

- 12 -

FY2022 Sales Forecast per Sales Category

FranchisechainsFacilities forthe elderly

8,310 million yen （ YoY +14.2%）
Assumed number of stores at the end of the fiscal year: approx. 1,000 stores (approx. 70
stores increase from the previous fiscal year)
Delays in opening stores are expected to be resolved in the second half of the fiscal year,
while the new "Takushoku Life" chain is expected to make only a minor contribution to sales
during the current fiscal year, as most of the stores have just opened.

1,410 million yen （ YoY +14.8%）
Major renewal of frozen food "Kodawari Chef" from November 2021
Kazo Distribution Center will start operation in March 2022, reducing storage and picking
costs, aiming to further expand sales and improve profit margins

2,000 million yen （ YoY +29.3%）
Direct Sales /OthersManufacturing limits have been eliminated, and aggressive sales promotion measures will bepromoted from this fiscal year.
Sales activities of OEMs are also favorable, and many projects under product development
will start posting sales from 3Q. The operation of the above distribution center will enable us
to provide total service of "manufacturing, storage, and picking", which will significantly
increase our competitive advantage.

- 13 -

FY2022 Forecast overview
Upward revision for 1H, but full-year forecast unchanged＜Forecast for the second half ＞
Sales

All sales categories are expected to remain strong.
Direct sales and other sales plans are weighted toward the second half of theyear, but we aim to achieve the plan.

cost
price

Upside and downside are competing against each other, with many factors
unclear.
Steady pace of production efficiency improvement at Tochigi Factory◯ (May add two "◯" marks since they are above expectations)× Soaring raw material costs; various price increase notices are comingin every month at the moment
× Part of the real estate acquisition tax for the Tochigi Factory, approx.
55million yen, will be incurred from 3Q onward.

SG&A
expenses

Many downside factors in 2H non-consolidated
Operational efficiency improved by operating Kazo Distribution Center (bringing
warehouse operations in-house)× However, initial costs for Kazo were more than planned.
× Advertising expenses are also higher than planned for direct sales
expansion.
× Real estate acquisition tax of Kazo, approx. 7 million, will be incurredfrom 3Q onward.

- 14 -

Improved gross profit margin and productivity
Gross profit margin of own factory※ Includes internalized picking costs (SG&A expenses)※Due to systemchange, November
sales are recorded
in December.

※ Initial costs
increased due tothe beginning of the
Tochigi Factory operations.

※Gross profit recovered despite anincrease in depreciation and theinternalization of picking, which had beenrecorded as SG&A expenses.

Material costs

Some outsourced products were brought in-house. Reduced impact of
raw material price raising.

Labor costs

Manpower saving through mechanization enables the Tochigi Factory
to produce the same amount of food ingredients with about 30% fewer
workers than the Gunma Factory.

Outsourcing
expenses

In-house production of picking operations that had been outsourced(reduction of SG&A expenses)- 15 -

Reduction of picking costs (SG&A expenses)
In-house picking of chilled products at the Tochigi Factory and mechanization of SG&A
expenses
Achieved a cost reduction of approximately 5 million yen per month.
Reduction effect will increase as sales grow in the future.
Comparison of chilled productpicking costs(6 months)

R
E
D
U
C
T
I
O
n
E
F
F
E
C
T

Reduction in chilled product picking costs-28.7 million yen for 5 months out of the first half※

Sorter Introduced atTochigi Factory
Mechanized picking ofchilled products※

Chilled products
Picking cost
(Recorded as SG&A expenses)

FY2021
2Q

FY2022
2Q

Outsourcing costs for August 2021
(In-house production started in September in the
middle of 1Q)※ Assumed cost of outsourced picking against actual sales of chilled products manufactured in the company's own factory - Cost
(August outsourcing cost + in-factory labor cost)- 16 -

Progress at Kazo Distribution Center
2022/32022/42022/52022/62022/7

Delivery of manufactured products
Transfer products stored in an
external warehouse
Started warehousing business(Storage and picking of othercompanies' products)
Relocation of call center

Ware
house
”A”

Ware
house
”B”

Ware
house
”C”

Consolidation of multiple external
warehouses into one location

Ware
house
”D”

By consolidating products stored in other companies'
warehouses into our warehouse, we can visualize
inventory, manage it appropriately, and reduce
warehouse costs, picking costs, and delivery costs
between the factory and warehouse. Furthermore,increase sales by undertaking storage and picking ofother companies' products.

- 17 -

ESG Initiatives
Environmental
Initiatives

Human Rights
Initiatives

・Solar power generation started at Tochigi Factory andKazo Distribution Center・Weekends are closed at Gunma Factory. Improved
Job Satisfaction

In March 2022, we began using solar power
generation on the roof space of our Tochigi
Factory.Our annual electricity consumption at the
Tochigi Factory alone is approximately 2,400,000
kWh per year. From now on, we will be able to covera part of this amount with solar power.※Plans to
introduce the system at Kazo Distribution Center
By using energy that does not emit carbon dioxide,
we will strive to realize a sustainable society.

Starting in February 2022, Gunma Factory will beclosed on Saturdays and Sundays. Gunma factory,
which used to operate at full capacity seven days aweek, can now manufacture more than ever even with
five-day-a-week operation thanks to improved efficiency
through mechanization. （Tochigi Factory is currently

Installed solar power generation
Tochigi Factory andKazo Distribution Center

operating six days a week as it is in the process of stabilizing
operations.）

Gunma Factory has been receiving many requests from
employees for fixed holidays on Saturdays andSundays, and now all employees are able to take themequally, leading to higher employee satisfaction.
We also offer other benefits such as a scholarship
repayment program, wedding and maternity gifts, andpermanent remote work in departments where possible,
and will continue to improve job satisfaction.
- 18 -

Company Overview- 19 -

Our Management Philosophy and Mission【Our Mission】
We prepare bento’s at reasonable prices and deliver to your home every day sothat elderly people living alone or needing long-term care who have difficulty
cooking or going out to shop can eat without any trouble.

- 20 -

Company Overview
Company NameSILVER LIFE Co., Ltd.

Representative

President, CEO : Takahisa Shimizu

Established

October 2007

Capital Stock

724 million yen (as of July 31, 2021)

Address

Highness Lofty Level 2, 4-32-4, Nishishinjuku, Shinjuku-ku, Tokyo, 1600023, Japan・Franchise management of food delivery service for the elderly(Service names: “Magokoro Bento”, “Haishoku no Fureai”, “Takushoku Life”)

Businesses

・Food ingredient sales to senior-care facilities(Service names: “Magokoro Shokuzai Service”， “Kodawari Chef”)
・Own brand and OEM sales of frozen bento products(Service name: “Magokoro Care Shoku”)

Websitehttps://www.silver-life.co.jp/

Employees

337 (Full-time: 128 / Part-time: 209）As of the end of July 2021

Factory・Gunma Factory:1678-1, Nakano, Ora-machi, Ora-gun, Gunma, 370-0603, Japan・Tochigi Factory:576-6, Hakaricho, Ashikaga-shi, Tochigi, 326-0327, Japan

Distribution Center

195-1, Akaiwa, Chiyoda-machi, Ora-gun, Gunma, 370-0503, Japan- 21 -

Our History
Date

Main store / Business development

Stores / Business development

Oct. 2007 Company established in Setagaya-ku, Tokyo
Nov. 2007
Apr. 2009
Sep. 2010

Opened the 1st directly managed store in Setagaya-ku, Tokyo
Launched our first franchise chain “Magokoro Bento”
Accomplished 100 "Magokoro Bento" stores
Launch of our food ingredient delivery service “Magokoro ShokuzaiJun. 2012
Feb. 2013

Service” to senior-care facilities
Purchase of the Company factory site in Ora-machi, Ora-gun,
Gunma

May. 2013
Aug. 2013 Absorption-type merger with Next Community Co., Ltd.
Feb. 2014
Apr. 2014
Oct. 2014 Enfranchisement of all directly managed storesFeb. 2016 Acquired ISO9001 certification for Our factory (Kanto region)
Mar. 2016 Head office moved to the current site in Shinjuku-ku, Tokyo

Launch of our second franchise chain “Haishoku no Fureai”
Launch of OEM sales

Accomplished a total of 500 "Magokoro Bento" & “Haishoku no Fureai”

Sep. 2016
Oct. 2017

Accomplished 300 "Magokoro Bento" storesstoresDistribution center opened to Chiyoda-machi, Ora-gun,
Gunma

Oct. 2017 Listed on TSE Mothers
May. 2019

Accomplished a total of 700 "Magokoro Bento" & “Haishoku no Fureai”
storesJan. 2020 Listing shifted to the TSE, First Section- 22 -

Business Model
Schematics of our Business Operation
FY2021 Sales Percentage

Raw materials providers / Out-sourcing factories
Foods,
Cooked foods

Loyalties,
ロイヤリティ等
etc.

Payment

Our
Factory

Our
Company

Food& Ingredients
食材販売売上高Net Sales

Management
Cooked foods

Frozen
Bento

Deliveryfees

Payment
loyalties,
Etc.

Payment

553 storesnationwide*

Franchise chain
stores
381 storesnationwide*

Bento
Payment
General Customer

OEM supplier

General Customer

Food
ingredientpayment
Food
Ingredient,
etc.

Foods
Delivery

Facilities for the
Elderly, etc.

Mainly Wholesale Ingredients
A continuous profit system in which ourfood net sales increases proportionally to
the growth in net sales (number of meals)of franchise chain stores.
(Food net sales include sales for facilities
for the elderly, OEM, and in-house sales)*As of the end of July 2021
- 23 -

- 24 -

(increasing population of late-stage

External Environment elderly)

Our main target, the late-stage elderly, will increase exponentially beyond 2025
Population trends and future forecasts for theelderly (over 65 years old) and late-stage elderly (over 75 years old)(ten thousand)

2,417 2,446 2,387

2,500

2,180 2,288

Baby boomer generation will
become late-stage elderly
2,000
1,734
1,613
1,517
1,407

1,500
1,301

1,798

892

2,277

2,248

1,872

1,760
1,681
1,747

1,522
1,497 1,428

1,000

2,239
2,260

1,643
1,154 1,133

1,424

900

1,258

699
597

516
500
309
107

376
164

366
224

Future Forecast

0

Population age 65-74

Population aged over 75

Source: Cabinet Office, White Paper on the Aging Society- 25 -

(a business that does not rely on long-term

External Environment care insurance)

Changes in the Working Generation and the Elderly Population(ten thousand)

The working generation (15 to 64 years old) is decreasing,and the elderly population is increasing

6,000
4,000
2,000

Dependent Population(age 65+)
18.26 million
8.86 million

33.47 million

37.82 million

37.04 million

0

1975年

-2,000

1995年

2015年

2035年

2055年

Moving toward society where 1.3 people of the working
generation will support 1 person aged over 65.
Social security deposit benefits per person will decrease-4,000-6,000The increase of expenditure toward COVID-19 measuresin 2020 makes it even more difficult to secure financial
resources for long-term care and welfare-8,000Supporting Population(age 15~64)-10,000

Future Forecast

Source: Cabinet Office, White Paper on the Aging Society(cases)Bankruptcies in Elderly Welfare / Nursing Care Businesses
108 111 105 111120(90% of net sales rely on the long-term care insurance
system) The long-term care business is destined to
become difficult in the future.

100

76

80

60

46
35

40
20

15

54
38
27

23

54

In this upcoming era, only businesses such as food
distribution services for the elderly, which can be
managed without relying on long-term care insurance,
can support the lives of the rapidly increasing elderly
population.

33

19

0
2005

2007

2009

2011

2013

2015

2017

2019

Source: Tokyo Shoko Research, 1st half of 2020 "Elderly Welfare / Nursing Care
Business" Bankruptcy Situation- 26 -

- 27 -

Our Advantage: FC Network stores opened➢ Low-cost opening (non-visit-type stores with no restriction to location / no large kitchen equipment required)➢ The simple process of preparing cooked ingredients and delivering (the business can be started alone)➢ Stable supply of high-quality cooked ingredients from FC headquarters (no cooking experience required)This helped the number of stores to increasesignificantly in a short period of time

(Stores）
1,000
900

800

381

February 2014

700

Launch of our franchise chain“Haishoku no Fureai”

338

600

299

February 2013
500

Acquired Kanto region factory

April 2009

400
300

85

138

Food Distribution Service
No. 1 Number of Stores *7

November 2007

200 Launched our first directly
managed store in Setagaya3
100 ku, Tokyo09

Launched our first franchise chain“Magokoro Bento” in Ota-ku, Tokyo

2
14

245

196

1

1
14

85

FY2008FY2009FY20104
169
FY2011238

FY2012323

FY2013

Magokoro Bento

361

352

356

367

381

FY2014FY2015FY2016FY2017FY2018Haishoku no Fureai

Directly Managed Store430

FY2019496

FY2020553

FY2021* Our company investigation- 28 -

Production System allows Multi-Variety

Our Advantage: Random Production

Our factory 3 days menu

*this is an image➢ Manufacturing line required in a general foodfactory (dedicated line for a single productgroup)
A meat buns dedicated factory (1 million meat buns produced
daily flow from a buns dedicated machine to a conveyor.
Although there are meat buns and bun with bean-jam filling
differences, they are "Principally the same product group").

➢ Manufacturing line required for food distribution
service (line that can handle random production ofother varieties)
Since meals are distributed daily, the same product group cannot beprovided every day. 12 items made today, 12 items made tomorrow, 12
items made on the 3rd day, all should be different.

Only few factories have multi-variety random production lines which are thought to beinefficient (Usually cannot be maintained without a certain sales scale like our company)↓
As a result: Managing low-cost manufacturing that generates profit
despite the large variety of products- 29 -

Production System that provides an

Our Advantage: abundant Menu with Low Prices➢ Tenderness, seasoning, and nutritional balance suitable for the elderly to eat➢ Rich menu variety (more than 1,000 items) you will never get tired of for your everyday meals➢ Delivered to franchise chain stores refrigerated (chilled) to improve texture (regular meals)
Regular meal
➢ Mainly Japanese food bento for thegeneral elderly. Consideration to
nutritional balance and ease of eat

Komachi (smaller portion)➢ A bento with fewer calories, less salt,

and a smaller portion of a regular mealfor elderly people with smaller appetites

Puréed meal
➢ A puréed meal bento which looks thesame, for elderly people who havedifficulty chewing and swallowing

Price：
450yen+tax～

Price：
320yen+tax～

Price：
540yen+tax～（sides dish only）（sides dish + rice）（sides dish only）

Calorie-adjusted meal

Protein-adjusted meal

➢ A bento for people who need to calculate➢ A bento for people who need to calculate

calories and salt intake. Manufactured to
be almost 240 kcal no matter what you
eat

protein intake, such as people who go toa dialysis clinic regularly. Protein is 10g orless per meal

Price：
600yen+tax～

Price：
700yen+tax～（sides dish only）（sides dish only）- 30 -

Our Advantage➢ A p r o d u cti on l i n e t h a t c a n m a nuf a cture r e f r igera ted ( c hi lle d)

Production Systemi ngr e dients s pe c i alizing i n f ood di s t ribution➢ Fl e xi b l e p r o d u cti on s ys t e m c a p a bl e o f m ul t i -va riet y m ul t i -production➢ M e rit of s c a l e a nd r e a s ona ble pr i c e l i s ting d u e t o ma s s p r o d ucti on➢ "No. 1” number of stores in the industry (An internal investigation of Magokoro

Franchise Chain
Network

Bento & Haishoku no Fureai total) of our food distribution franchise chain network forthe elderly (834 stores total as of the end of July 2020)➢ A store network that covers the last mile to your home

Our biggest advantage is the consistent system we have from manufacturing to delivery- 31 -

Our Advantage (summary) Consistent System
GeneralFoodDistribution
RelatedCompanies

Manufacturer
Development
開発

Manufacturing
製造

Company
Product development
Manufacturing Factory,by Nutritionist
Affiliated Factory

Logistics
Companies

Logistics
物流

Food Distributor Business Area
販売
Sales

Picking of Freezing /Franchise chains,
Refrigerating Warehouse Facilities for the elderly,(October 2017)
OEM/Others

配達Delivery

Delivery to customers
from our nationwide
Franchise chain store
network

Feedback from franchise chain stores and customers

Purposeand
Features・Cost advantage due to mass production
・Product development based on customer
feedback (franchise chain stores)
・Ensure the "Safety and Security"

・Efficiency of storage anddelivery
・OEM sales expansion

Food distribution service for the elderly
Number of stores: 834(As of the end of July 2020)- 32 -

Handling of this Document◼ The statements in this document regarding future-prospects are based on current
information and may fluctuate due to economic trends, market environment, our relatedindustry trends, and other internal and external factors. Therefore, please have in mind
that there are risks and uncertainties that the actual results may differ from thosedescribed in this document regarding future-prospects.
◼ This document does not constitute or solicit an application for acquisition of any
securities, an application for sale, or an application for purchase (hereinafter referred toas “solicitation”) and is not intended to perform any solicitation activities and may not be
the basis of any contracts or obligations.
◼ Although we take the utmost care for the information in this document, there may beerrors in the posted information, and you may experience damage from data falsification
or data downloaded by a third party, but we do not take any responsibility for any
reason.

- 33 -