Oisix ra diachi Inc.
Q2 Financial Results Briefing for the Fiscal Year Ending March 2022
November 11, 2021

Event Summary[Company Name]

Oisix ra daichi Inc.

[Company ID]

3182-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q2 Financial Results Briefing for the Fiscal Year Ending March 2022

[Fiscal Period]

FY2021 Q2[Date]

November 11, 2021

[Number of Pages]

56[Time]

16:00 – 17:03(Total: 63 minutes, Presentation: 31 minutes, Q&A: 32 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers][Analyst Names]*

1
Kohei Takashima

Representative Director, CEO

Hideki Sumi

Tokai Tokyo Research Institute Co., Ltd.

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A.

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Presentation
Sato: Now, it’s time to start, let us begin. Thank you very much for taking time out of your busy schedule toparticipate in today's briefing on the interim financial results for the fiscal year ending March 31, 2022, ofOisix ra daichi Corporation. My name is Sato, Investor Relations, and I will be your host today. Thank you.
Today's financial results briefing will be divided into 2 major parts. In the first half of the session, our CEO, Mr.
Takashima, will report on our growth strategy and mid-term financial results for about 30 minutes. After that,
we will move on to the Q&A session with the participants.
I will explain the details of this later. Now let us move on to the explanation. Mr. Takashima, please.
Takashima: Hello everyone. Thank you for joining us today. It seems that this online style is now completely
established. I would like to talk about the interim financial results.
I've prepared a lot of materials, so I'm afraid I'll be rushing a bit, but I'd like to talk about our overall strategy
and the status of our business performance for about 30 minutes.

First of all, regarding our growth strategy. We are a company that places great importance on our corporate
philosophy.

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When the 3 companies, Oisix, Radish Boya, and Daichi wo Mamoru Kai, merged, they recreated theircorporate philosophy, which is the future of dining, the future of farming. As you can see in the second linefrom the bottom of this page, we are committed to solving social issues related to food through businessmethods, and we consider this to be a very important part of our growth strategy.

1 of the growth strategies we are currently considering is to use our business model and the power oftechnology to provide food that is good for the earth and good for people.
Of course, each brand has its own requirements, such as being safe and secure even for small children, being
short on time but not feeling guilty, being healthy and tasty. There are many different values for each brand,but overall, we believe that we can provide food that is good for the earth and good for people by utilizing
our business model and technology.
Therefore, we are aiming to realize the power of what we call sustainable retail in our company.

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To be a little more specific, what does it mean to be friendly to the Earth and people through business models
and technology?
The term “people-friendly” is easy to understand since we mainly deal with organic vegetables and productsthat do not use pesticides, but I would like to briefly explain what it means to be kind to the Earth as well.
We have many different brands, but we are basically a subscription company. Since this is a subscriptionbased system, we are able to predict how much crop we will need at any given time.
I think we can create a sustainable supply chain with no waste by using this forecast to meet both the demandsof the fields and the needs of the customers.
We have our own algorithm. I'm talking about the purchasing data of 400,000 customers, information on the
supply and the current growing conditions of 4,000 crops. The basic business model and technology is that
we use algorithms to match these data every week, so that no food is wasted. I believe that we will create a
supply chain that has almost no waste and zero food loss.
In addition to this, we would like to use agri-tech and other technologies to develop more sustainablecultivation methods, or to propose a more sustainable diet through a new food culture, including alternative
proteins.
This is the overall shape of our current strategy as we envision it.

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Today, I would like to focus on food loss in this context. Our company wants to thoroughly eradicate food loss.
In terms of food loss, a typical store-based retailer would generate 5% to 10% loss, but with our company,
loss is only about 0.2% in the distribution process.
We have been able to keep food loss to an overwhelmingly low level as a distributor. Not only selling food,but we also want to reduce food loss in many areas of the supply chain, from the farmers who produce thefood to the customers who eat it.
In the area of production, many 100 tons of food are thrown away in the fields, and in the area of eating, a
lot of food is thrown away at home, so we would like to contribute to these areas.

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I'd like to talk about some of the specifics, but first of all, in terms of the production process, things happen in
the field that are different from industrial products. For example, the shape and size were not as planned. Or
it may suddenly come off too much, and so on.
In general, distributors have never accepted this kind of uneven crops before. We accept these products,
because we have services like Kit Oisix, Fuzoroi Radish, and the service of Radish Boya, which we started thisyear. We would like to make it possible for people to eat everything.

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Also, upcycling, which we started this year, has been more successful than I expected. Theses random
products are eatable if you want to.
Crops like crooked carrots and overly large pumpkins can be eaten if you want to. But they require a lot of
ingenuity to make people eat them.
Upcycling is not about recycling, but about increasing value and circulation. We have started to turn crops likebroccoli stalks and radish peels which used to be discarded into chips and sell them as food ingredients.
By expanding this upcycling area, we would like to contribute to further reduction of food loss.

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We are also planning to establish a food rescue center, which I think was announced today.
Until now, we have not been able to take in all of the crops from the farm producers. We would like them tobring in the excess, uneven crops or stems and skins to our food rescue center, where we will use them in a
waste-free manner.

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We are thinking of 3 specific functions, such as Kit Oisix, using it for processed products, or converting it into
up-cycled products.
And the quality retention period can be extended by using technology. Using these kinds of functions, we arethinking of setting up food rescue centers and eliminating food loss throughout the supply chain.
We are happened to be in the process of relocating our new distribution center to Ebina, and we have abuilding on the site that we used to use. We would like to convert it into a food rescue center.

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9Next, as I mentioned earlier, the percentage of sales is still very low at 0.2%, but we are thinking of further
refining it.

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10When compared food loss with customers who have not used Kit Oisix before, and those who have been using
it, food loss at the dinner table has been reduced by about 1/3.
It has become clear that services such as Kit Oisix and Chanto Oisix, which allow you to use up all of your food,can contribute greatly to reducing food loss at home, so we would like to expand this service.

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We also do some carbon neutral things other than food loss.
In the first place, we calculated the greenhouse gas emissions of our food delivery and food subscription
businesses. It is difficult to calculate this because the logic is not yet solidified, but we have tried.
As a result, we found that we were able to operate our home delivery business with about half the emissions
compared to traditional brick-and-mortar purchases.
One of the special features of the products we use is that we do not use chemical fertilizers or pesticides forour organic vegetables and other products, which could further reduce CO2 emissions. We haven't calculated
that yet, but we are thinking about creating a business model of reducing more CO2 emissions.

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We would also like to work on some other areas in the future.
For example, we can actively sell crops that are being converted to organic to make producers convert toorganic so that they will use much less chemical fertilizers and pesticides.
This will reduce the emission of greenhouse gases, and we will support farmers who take on this challenge.
We can also study the use of bio-charcoal to absorb the greenhouse gases generated. We will develop thesethings in the future.

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In addition, we would like to invest in food technology that can play a role in such a new food culture. Or wewould like to develop it ourselves.
We have already invested in one company in the US and 1 company in Japan that produces plant-based animal
protein, and we are also discussing business alliances with various companies in Japan and overseas.

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In addition, Radish Boya and Daichi wo Mamoru Kai have their own delivery vehicles, and we would like tostart experiments to see how much of fuel efficiency we can achieve by using clean energy in these vehicles.

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The other thing is that the spread of veganism means that it reduces the amount of animal protein that
produces the most greenhouse gas emitting. One-third of the world's greenhouse gas emissions come fromthe process of making and selling food, and their biggest source is the process of growing animals.
Everyday veganism or full-time veganism is quite a hurdle to overcome, but I believe that by expanding theoccasional vegan diet, say 2 or 3 days a week, we can contribute to the Earth and our health.
Through Purple Carrot, which we acquired in the US, we are expanding into meal kits and other frozen foods,
and we are now selling a lot of vegan meal kits in Japan.
Today, I talked about what we are working on and the direction we would like to focus on in order to achievesustainable retail.

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I would like to report on our performance in the remaining time.
First, in terms of overall business performance in the first half of the year, I thought it would be quite a hurdle
to achieve continuous growth this year compared to the previous year because of the tremendous growthlast year, but I think we are making better progress than I expected.
The number of people is also increasing, and then about ARPU. As for sales and profits per capita, I thoughtthat the COVID-19 would be resolved a little sooner, and the customers' eating habits would return to normal,
and ARPU would go down.
If you look at Japan and Purple Carrot in the US, the sales and profits per capita are increasing at a higher rate
than expected.
As a result, EBITDA has increased and is higher than expected.

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17Overall, net sales were JPY56.16 billion in the first half, EBITDA was JPY4.18 billion, and operating income was
JPY3.34 billion.
Compared to last year, when we were not able to really promote our products, but sales grew, this year has
been relatively smooth, or rather, we have been able to grow normally.

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As for sales, we have been showing the actual results and ability since last year or so, and we think that the
ARPU portion, which has been growing more than before COVID-19, will disappear when life returns to normal,
so we subtract that from the actual results.
Since the merger of Oisix, Radish Boya, and Daichi wo Mamoru Kai, I think the growth has been about up 20%
each.

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Profit growth is a little higher, at about 35% to 40%.

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In comparison with the previous year, ARPU was lower than last year, and this had a negative impact of about
JPY3 billion, but the impact of the increase in the number of members and total growth resulted JPY4.7 billion.
Then there is the growth in the US business and the growth in other businesses, and overall sales are up nearly
JPY9 billion YoY.

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In terms of profit, please see number 2.
The biggest thing is that we were not able to invest in this growth last year.
Sales increased, the ARPU was very high and the profit margin was high, but the fact that we could not invest
in growth was a special case last year. I think our company's situation is relatively healthy this year, as we aremaking solid investments for growth.

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As for seasonal fluctuations, we have a type of business where there is a lot of seasonal fluctuation every year,
but last year we didn't have much of that, but this year the fluctuation is becoming more intense than lastyear.
Summer vacation is also decreasing. So, I think that from next year onwards, the trend will probably be more
like that of previous years.

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Then, comparison to the previous quarter.
Exceptionally, in the past 2 years, the first quarter and second quarter have been almost the same, but ingeneral, the second quarter has always been tough. It's summer vacation and everyone is back home, so it's
been tough. It will inevitably mean that both sales and profits will be difficult.
I wonder if the move of people happened this year. If you compare 1Q and 2Q, there are some areas where
sales are growing a little bit but profits decreased. I could explain why. We are building a distribution center
this year, so I think the cost of the relocation had an impact.
In addition, the ARPU of the centers is gradually declining, so the profit margin is returning to normal.
Yes. It's nice, this area.

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In the future, in the second half of the fiscal year or the next fiscal year.
First of all, we would like to continue to increase the number of members, but ARPU will drop a little more,then become constant, and now we would like to take on the challenge of increasing it a little regardless of
COVID-19.
Then there is the cost side. The cost of goods will gradually decrease as logistics increases, but I think we arein a situation where we can spend more and more on promotion costs, so we can relocate the center, and wewill make sure to spend on such costs.
Logistics costs will temporarily increase this fiscal year due to the relocation process, but we expect them tobecome more muscular in the next fiscal year and beyond.

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I'm going to run the rest of the way.
As for Oisix, the number of members has increased by 27%, although it has not reached to1.3 times.
There are some customers who order very infrequently and have almost no sales, so we thought it would bebetter to deal with those customers in terms of operating costs. We have started the process of removing
dormant customers from the count, which has affected about 2,000 customers in the second quarter.
I think there will be an impact of about 10,000 people in the third quarter, but it does not particularly affectto overall sales. I'll let you know that we are working on that.
A decrease of 2,000 customers would have little effect on the denominator of ARPU, but in that sense, ARPU
has been maintained better than expected. The Oisix situation is maintained at 97%.

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This means that Kit Oisix is also growing steadily.

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We also announced today that we are working with Akachan Honpo to create Oisix with Akachan Honpo.
Mothers of small children, go to Akachan Honpo, and we are thinking of working with Akachan Honpo tocreate a service specifically for them.
We are thinking of a service that will allow us to utilize the incentives of both Oisix and Akachan Honpo, andintroduce it to our customers on Akachan Honpo’s website and in its stores. Also, in the future, we would liketo develop a child-branded product line with Akachan Honpo. I’m not sure when it will be. I'm hoping to getstarted next year or so.

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As for the logistics topic, the New ORD Ebina, which I have been talking about for a long time, cost about JPY4
billion, but it is now in test operation.
I've decided that it's a bit risky to relocate it during the year-end sales season, so I'm doing it on a test basisand hope to relocate it after the new year. We will be relocating it at the beginning of the year, and our current
location will be converted into a food rescue center, and we are thinking of doubling the capacity of New ORD
Ebina.
The current Ebina facility will be used as a food rescue center and a Kit Oisix production center. We will finish
the relocation of New ORD Ebina in the fourth quarter of next year.

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Then, in the fall of 2023, there will be the refrigeration center. The one I just mentioned is for cold storage,
but we are thinking of building a refrigeration center in Atsugi.
We will probably continue to discuss about what to do about the Kansai area, Radish Boya, and Daichi wo
Mamoru Kai after this, but this is all what is concrete as of today. We will continue to build more and morebases, so that we can withstand the expansion of capacity.

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30Daichi wo Mamoru Kai got only a little bit larger, but it has the highest number of members since the businessmerger. Last year, it grew quite a bit, and I was wondering how it would do this year, but it exceeded last year.
It's 101% compared to the same period of the previous year, so it's only a small increase, but I'm very happy
that it's even a small increase.

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31Similarly, Radish Boya.
Radish Boya is a bit higher. It's 108% compared to the same period last year. I am also happy to see that Radish
Boya has also increased its sales compared to the previous year, while Daichi wo Mamoru Kai did quite welllast year.

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Each of them appeals to the health of the product, or to the unevenness of the product, such as out-ofspecification or wastefulness.
We've been doing those kinds of things, and I think they are contributing to our growth little by little.

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The rest of the business.
As for the support from other companies, or rather the ones that we are working with other companies,
ISETAN DOOR and d Meal Kit are both growing steadily.

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Tokushimaru is also growing very fast, and I think they will have almost 1,000 sales vehicles.
Considering the number of people who have hardship in shopping, I think there is an opportunity for up to
4,000 or 5,000 vehicles, and I think it is our responsibility.
Once we reach 1,000 vehicles, the scale of operations will become too large for our existing operations tohandle, so we are in the process of reviewing our operations at the same time. I am sure that the total amountof distribution will exceed last year's JPY20 billion.

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In overseas, Purple Carrot grew rapidly last year. There was quite a lot of influence from COVID-19, and thenwe turned a profit, and I think there was some effect from the transfer of some of Ody's know-how.
I thought that sales would be quite difficult this year because of this, but they were better than expected, andthe number of members has not decreased as much as I thought, or rather, it has been maintained.

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Even so, I think that the number of meal kit members will probably decrease somewhat in the future, and weare currently working on how to respond to that. You can see frozen food on the left. This is what we aretrying to do by selling these products in physical stores.
On the right side is Ready to Eat, which is not a meal kit, but a meal itself. We are starting to deliver the riceitself.
We would like to expand our product portfolio in this way, and expand the PURPLE CARROT brand beyond
meal kits, as there is no brand in the US that represents veganism today.

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As for Hong Kong and Shanghai, Hong Kong is finally bottoming out, and is promoting collaboration with brickand-mortar stores.
Shanghai has been quite a challenge. People haven't been able to go there, but from about this month, people
will finally be able to go there. The start-up took while because we didn't have enough people available, but
we hope to speed up the start-up process.

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As for the other business of selling meal kits at brick-and-mortar stores, the number of stores is growing quite
well.

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Although the nursery school business was facing a headwind because of COVID-19, but this year the numberof nursery schools has increased, and I think that both of these businesses are gradually contributing to the
Oisix brand.

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Also, as I announced yesterday, when we acquire customers on our own, it is said to be a ground game, but it
is a real contact point. We have been promoting the acquisition of customers through real contact points withthe same or higher acquisition efficiency than the Internet.
Because of this, collaborations such as the one I mentioned earlier with Akachan Honpo went quite smoothly,
and we are able to visualize it.
We started to sell this method we had developed to other companies, little by little. It has been very popularand successful, so we decided to commercialize it and started a business called Space Ad. We would like tostart a business that uses space for advertising.

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Also, Toyoichi is a company that we made a subsidiary last year when we invested in Tsukada Farm and AP
Company. It’s collaboration with Oisix, Radish Boya, and Daichi wo Mamoru Kai is progressing quite well, andthe volume of transactions for us is increasing rapidly.

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DEAN & DELUCA is a related company.
Although it is facing a headwind from COVID-19, it is beginning to see new strengths in such areas as thedevelopment of events in regional cities, and I believe that its performance will improve significantly fromhere on out.

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Another topic is the delivery of food to medical professionals, which we have been working on since May lastyear.
With the cooperation of 127 unique companies, we have donated over 700,000 meals, which is over JPY700
million to date.
I was thinking to terminate the project as COVID-19 convergence is getting quite visible, but I think it would
be a shame to waste the platform that we have created.
I am thinking to convert the platform to WeSupport Family which is a support platform for households withpoor children, especially single parents. In collaboration with 127 companies, we are thinking of new ways toaddress other social issues.

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Also, Tokyo Harvest, again this year, could not be held offline, so it was held online.
When we held the event under the theme of Start without Throwing Away, it was well received by the media,
and we have received several offers from food manufacturers to participate with us.

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The wheelchair rugby team that we sponsor for won the bronze medal.
I have talked too much. That's all from me for now.
Sato: Thank you very much, Mr. Takashima.

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Question & Answer

Sato: Now, let's move on to the QA session.
Mr. Sumi, please ask your questions.
Sumi: Thank you. My name is Sumi from Tokai Tokyo Research Institute Co., Ltd. I would like to ask you 2questions.
Firstly, about the details of the full-year plan described in detail on page 32. One of the reasons why you leftyour full-year plan unchanged this time is that you expect ARPU to gradually recover in the second half of theyear. Looking at sales and other aspects, you expect the number of members to increase, but if there are any
uncertain factors or concerns, please tell us about them.
Secondly, I would like to ask you to update us on the measures you are taking after Kit Oisix. You have beenworking on new initiatives such as Chant Oisix, and I would like to know if you have any new updates on thestatus of customer orders, the second pillar of your product policy after Kit Oisix, and so on. That’s all.
Takashima: Thank you. The reason I didn't change upward is that I can't read the influence of COVID-19. The
situation of the coronavirus and its impact on people is very difficult to predict, and the year-end sales season
in the third quarter will have a significant impact on profits and sales.
Last year, people didn't really travel overseas or domestically, but this year, I don't think people will gooverseas much, but I'm not sure about domestic travel yet. Since that area was quite uncertain, I thought itwould be a better use of resources to look at the situation and share it when necessary, rather than trying
hard to predict it.
In terms of uncertainties, I think the biggest and only one is that we don't know much about the status andimpact of COVID-19.
As for the second pillar, Kit Oisix is actually the second pillar of our business. Oisix originally focused on
seasonal ingredients. It still has about 70,000 users. Kit Oisix was designed to deliver ingredients as-is to about
60,000 to 70,000 users in season, but we felt that we had reached that number, so we started Kit Oisix.
After that, there were some customers who really didn't like cut vegetables, so we launched Chant Oisix, andnow there are 70,000 users on Chant Oisix, so we have about the same number of customers on Seasonal andChant Oisix, and over 20,000 on Kit Oisix.
On the other hand, we are also doing some collaborations with other companies, such as the Gochimaru
project with Recruit, the dMeal project with Docomo, and the ISETAN DOOR project.
For us, we think about it while we are providing the service, but it is quite difficult to provide a service that
does not have 10,000 users. I think it will be difficult to provide a service that does not have 10,000 users in
the future. But if it reaches 30,000 users, it's okay, and I think that's about the level of our mommy service. If
it reaches 30,000 users, I think the service is not bad. If the number of users reaches 50,000, the business will
be worth about JPY10 billion, so 50,000 users is one of the key points. Kit Oisix is a special service in that sense,though, because it is quite prominent and large.
Rather than aiming for a service that will exceed 200,000 users, our approach is to prepare a [number ofservices] that can reach 50,000 users at first. If we think that we could reach 100,000 users like Chant Oisix,
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we will invest the appropriate number of resources. I'm thinking to collaborate with Akachan Honpo, which I
just announced, with a target of 50,000 users to JPY10 billion.
The 1 I'm working on now is a frozen food called At Oisix. It is less processed than a meal kit, and rather thana so-called Ren-chin -- cooked in a microwave -- frozen food, it is, for example, a frozen food that can be put
in a pan and cooked in 1 step. We've been experimenting with such things since about now, and we've started
to offer services that require less effort. In this way, we would like to find and implement several services thatcan reach 50,000 users first.
In that sense, the vegans are the same thing. I don't know which 1 will go, but I am starting PURPLE CARROT
vegan service. That's how it works. That's all.
Sumi: Thank you. That's all from me.
Sato: Thank you very much, Mr. Sumi. Mr. Saeki, please.
Saeki: My name is Saeki from the Nihon Keizai Shimbun. Thank you for your time today.
There are 2 points from me as well. The first point is, as you mentioned in your question earlier, that the yearend sales season this year will make a significant contribution to sales, but I was wondering if the timing forstocking up has already started, even though the situation is still uncertain. Please tell us about the trends inthe so-called year-end and New Year's shopping season, and what products and measures will be introduced
to meet these trends.
The other point is, as you mentioned earlier in the question about the upward revision, I do think that therate of progress in terms of profit is a bit conservative. If that is the case, rather than external factors, I would
like to ask you about internal factors such as sales promotion activities, labor costs, and investment, and rather
than a decrease in sales, I would like to know what specific measures you are considering increasing costs andexpand services.
Takashima: Thank you very much. When you asked me about the year-end sales season, I thought I wasn't
really an expert this year. In terms of the overall trend of last year and this year, everyone is moving forward
anyway. In some places, everyone started sales and promotional activities ahead of schedule from around
August.
Last year, our company did it ahead of schedule, and at the end of the year, we sold out and had nothing tosell. And it seemed to me that there were a lot of people who failed and rushed out. This year as a whole,
both our company and the world seem to be moving forward very fast, so it's hard to see clearly.
In that sense, the world itself and we are moving forward more than last year, so at this moment we are better
than last year, but it is very difficult to tell if that is good or not in total, and we are doing our best.
This is still a very red ocean. Since last year or so, more and more restaurants have started to take thischallenge seriously, so I think it will be a difficult challenge for a few years. In terms of the current situation,
things are going well, but it's hard to say if that's good overall or if we're just ahead of schedule.
Also, in terms of cost, in our business model, there are cases where people consider purchasing a product on
the occasion of the birth of their child, or on the occasion of their pregnancy, which is why we work with
Akachan Honpo. Another common 1 is starting new life. Specifically, moving to a new house, or a childentering kindergarten or elementary school. It could be a job transfer or a return to work.

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In other words, during the months of March, April, and May, customers change their lifestyles, their life stages,
and as a result, they consider new services, so I think the months of March, April, and May are the best time
for promotion.
If there is any investment that can be used this fiscal year as much as possible, of course it will not be wasted,
but we would like to invest from around the end of February to March in acquiring new customers. I've alreadystarted preparing promotions for a few things that I hadn't planned at the beginning of the year, but I think I
might be able to do this year. That is all.
Saeki: Thank you very much. I'm sorry. Allow me to give you one more question. This is somewhat related to
the year-end sales season that I mentioned earlier, but there have been many news reports about the rising
prices of fresh food, fish and vegetables. May I ask how your company hedges the impact, if any, of such pricehikes in fresh food and fish in your business?
Takashima: Basically, we procure our products without going through the market, so the prices are set directly
between us and the producers in advance, independent of the market price. The basic principle is that wepurchase at a certain price regardless of whether the price is extremely high or low.
So, if prices are going up, we buy from relatively expensive producers and sell to our customers at a higher
price, or rather at a reasonable price, so when the prices go up, people say that organic vegetables are not so
expensive. I think that's a slight advantage.
On the other hand, when prices are falling, there is no need for [inaudible] unless the prices fall dramatically,
so in that sense, we adopt a model where we purchase at a certain price and sell at a certain price throughout
the year.
Saeki: Yes, I understand. Thank you.
Sato: Thank you very much, Mr. Saeki. We will now move on to the answers to the questions that we havereceived in the text. This is the first question.
You have been stepping up your upcycling efforts, but do you have a sense that the upcycling culture will be
accepted by Japanese consumers? I expect the market to become bigger and bigger.
That's the question. Please answer.
Takashima: I'm not sure. The concept of upcycling, such as Okara, was originally developed in the food
manufacturing process. The wisdom of the Japanese food culture has been around for a long time, so I don't
think there is any cultural rejection of it. I think there is a cultural background to this, where people try to eat
whatever they can.
On the other hand, there is a fixed idea that such things should be relatively inexpensive. This is actually the
opposite. The manufacturing process is quite costly because it involves taking food that you don't normallyeat or that you have been throwing away, keeping it under good hygiene control, and then preparing it totaste differently than usual.
So, I think it's something that has always been easy to accept as a food culture. In other countries, it is alreadyvery common for people to understand the price range and eat the food, but I think that is the challenge inJapan. We have not been selling our products at relatively low prices, and this time we would like to take on
the challenge of conveying the value or the significance of our products, rather than lowering the price.
Sato: Thank you. Let's move on to the next question.

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Now, you are delivering services for relatively high-income consumers. Question is whether you are planningto develop products and services that are easy to use for low- and middle-income households in the future.
Please answer.
Takashima: Before COVID-19, I used to visit our customers' homes every month, and I was very surprised by
the diversity of income levels of our customers, and I think there is a strong impression that this service is onlyused by people with high income. In fact, I don't think that's the case there, and I think it's pretty much about
values.
However, I'd like to do something more reasonable than that income or assets. For example, the Chanto
service and Chanto Oisix that we are running now, are already an economical service because all the
ingredients are used up, so you don't actually buy anything that is wasted.
Further to this, can I say this? I don't know if it's right to say this, but at the moment, the prices are different
every week, but we are considering doing something like Chant Oisix, where we deliver at a fixed price. If werealize this service, you can have healthy and safe ingredients, and recipes for a fixed amount of money, andif you follow the recipes, you can use up all the ingredients without any waste.
Sato: Thank you. Let's move on to the next question.
The German home delivery company Hello Fresh has announced that it will enter the Japanese market, howdoes Oisix feel about this? Please tell us about the changes in the market environment as well.
That’s the question. Please answer.
Takashima: I've been running this company for about 21 years now, and I'm always troubled when people
who are generally perceived as competitors enter the market. However, I am so focused on my own businessthat I don't really pay attention to other companies.
Hello Fresh has announced its entry into Japan and Italy, and I know that it has already started in Italy.
In Japan, not everyone understands what a meal kit is, so I think we are in the phase of expanding the market.
I think it would be great if we could expand the market together. I guess that's about it.
In the US, I think the market has become much larger since HelloFresh entered, so I think it will be good if themarket becomes larger.
I've been asked this question at various times, such as when Amazon Fresh was launched, or when Rakuten
Market was launched. Basically, more people buying food on the Internet or eating meal kits is probably a
positive thing for us in total. In this context, I think it is important for us to go our own way in this premium
area.
Sato: Thank you. Let's move on to the next question.
The NEW ORD Ebina center will undergo a gradual cost reduction during the next fiscal year, but how will you
improve efficiency as the operating order rate declines compared to the initial capacity increase? Can you tell
us more about it?
Please answer.
Takashima: When we break down the logistics costs, there is rent and so on, but the big 1 is the labor cost.

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Therefore, the rent is a little inefficient because the occupancy rate has not increased, but as for the laborcost, it is sufficient to hire only what is necessary. We have invested a lot in the system this time, so we don't
need that much in labor costs.
If I were to explain, the concept is that the cost structure of a distribution center is based on labor costs rather
than rent or electricity costs, so even if the capacity is a little vacant, the cost will not increase dramatically.
This time, we are systematizing the costliest part of the labor cost, so we think we can reduce the cost, andthe effect will be felt even when the utilization rate is not high.
Sato: Thank you. Let's move on to the next question.
You once said that Radish Boya and Daichi wo Mamoru Kai were in the hemostasis phase, but I think thatphase is over and it is time for them to grow again. What are your future plans for investment and growth in
the 2 services? Or should I assume that other services, such as Chant Oisix, have a higher priority?
That’s the question. Please answer.
Takashima: I think both Daichi wo Mamoru Kai and Radish Boya are doing much better, at least compared tothe past. I'm not sure if the speed is fast enough to satisfy me, but I feel that some things went better than I
expected, and some things took longer than I expected.
After that, it's not just Daichi wo Mamoru Kai and Radish Boya, but also Chant Oisix, Kit Oisix, and Purple
Carrot. I don't prioritize them in a relative way.
In terms of figures, the rule is that if the lifetime value of a customer, the money we can get from one customer,
and the money it takes to acquire one customer exceed a certain level, we will invest more and more. In fact,
if we invest up to the limit, and when the limit is reached, we can no longer promote the product, so we havebeen improving promotion activities.
In that sense, we will continue to invest in all businesses up to the upper limit of our current capabilities, so
we will do so as long as we can build services, not in terms of priority. I feel like I'm investing more and more.
This is similar to what I said earlier about Oisix, but now I think that Oisix may be able to reach 100,000 users,
but probably not 200,000 users. I just don't think we're going to get there if we keep doing what we're doing.
We need to leverage our efforts to reach 200,000 users, and I feel that even if we try our best to reach 100,000
users, we may not be able to reach the 70,000 users of the original seasonal service.
As for Kit Oisix, I think we can make it go from 200,000 to 300,000 or even 500,000. For example, the healthy
services of the Fuzoroi Radish and the Daichi wo Mamoru Kai are starting little by little. While working on it, I
would try to determine the scale of the service, and work hard on that service until it reached that point. I
think it's a repetition of the process of coming up with new services before we exceed or reach that level.
That's all.
Sato: Thank you. Due to time constraints, this will be the last question and answer.
You currently have about JPY13 billion in cash. What is your view on the level of cash holdings? Also, what are
your thoughts on how to use the cash and deposits in the future and how to use the Company's shares thatyou have acquired?
That is the question. Please answer.

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Takashima: Yes, about cash. It's a difficult question to answer. If possible, I would like to keep at least 12
months of fixed monthly costs, which is enough to survive for one year even if sales do not increase as I haveseen companies which went broke due to a short of cash.
In addition to that, how do I use it in the future. For one thing, the new Ebina Center is costing about JPY4
billion, and the future Food Rescue Center will probably cost in the single digits, but the Atsugi Center will also
cost about JPY4 billion. In the future, if we consider Kansai and other areas, we will have to spend a certain
amount of money again.
In the area of capital investment, we will be making investments that are relatively a digit different from what
we have done in the past. Also, if there is an opportunity for M&A, we will take it, because we are making alarge profit now. I think we should use the money we have earned to pay for promotion costs, but I think weshould use the money for capital investment and M&A investment.
As for M&A, if there is a really good deal, and if there is a good time, we will execute it taking into account theconvenience of the other party. In addition to the timing, is it better to use cash or the Company's own stock?
I think it will take the form according to the convenience of the other party. That's all.
Sato: Thank you. As the time has come, we will now conclude the interim financial results briefing.
Thank you very much for taking time out of your busy schedule to join us today. Thank you again.
Takashima: Thank you.
[END]______________
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