Financial Results Brieﬁng MaterialFirst Quarter of the Fiscal Year Ending February 2025
TSE Growth Market (Securities Code: 2936)
July 16, 2024

1

Mission

Reinvent staple foods to make a healthy andsustainable lifestyle accessible to all
Our Goal is to Become “Nutrition Infrastructure”

2Part 1

Financial Results for the First Quarter (Q1) of the
Fiscal Year Ending February 2025 (FY2025)

3

Executive Summary

Net Sales¥3.66 Bn

+10.8% QoQ

Overcoming a downward trend caused by the voluntary recall of certain products, net sales havereturned to a growth path mainly due to reinforced sales promotions and enhanced productstrengths.

In-house
e-commerce(EC)¥2.30 Bn

+7.1% QoQ

The ﬁrst half of Q1 struggled with customer acquisition eﬃciency, but the second half saw
improvement, increasing subscribers to 217k (+11k QoQ). Enhanced product strengths also led to a
growth in purchase price and customer retention rate.

Retail(1)¥1.08 Bn

+18.6% QoQ

Despite no large changes in the store network, sales per store rose to ¥6,950 (+16.8% QoQ) due to
new product launches and product renewals matching the peak demand period for breads.

External
EC¥0.22 Bn

+13.4% QoQ

Revenue increased QoQ due to resumption of advertising.

Global¥0.05 Bn

+16.4% QoQ

Progress was made steadily, such as the accumulated number of bags sold in Hong Kong
exceeding 500,000.

OperatingProﬁt-¥0.43 Bn-

Proﬁt Margin(%)（-11.9%）The results were as assumed since we strategically invested heavily in advertisements during Q1, thetime when demand is strong.

Notes: In this material, amounts less than ¥1 million are rounded down. Ratios are calculated using actual values in one-yen increments and rounded to the ﬁrst decimal place. QoQ refers to quarter-on-quarter, and YoY refers to year-on-year.
1. Combined sales of “Retail” and “Others” as classiﬁed under the nutritionally complete food business segment indicated in the Notes - Revenue Recognition in the quarterly securities report.

4

Financial Highlights
Net sales increased QoQ in all sales channels, showing a steady return to a growth path. The operating loss increased QoQ, but this wascaused by enhanced sales promotion as planned, and our policy to achieve proﬁtability in Q2 through 2H remains unchanged.
Q1 FY2024

Q4 FY2024

Q1 FY2025

Net Sales¥3.73 Bn

¥3.30 Bn

¥3.66 Bn

+10.8％

In-house EC¥2.24 Bn

¥2.14 Bn

¥2.30 Bn

+7.1%

Retail¥1.19 Bn

¥0.91 Bn

¥1.08 Bn

+18.6%

External EC¥0.28 Bn

¥0.19 Bn

¥0.22 Bn

+13.4%

Global¥0.01 Bn

¥0.04 Bn

¥0.05 Bn

+16.4%

Gross Proﬁt¥1.83 Bn

¥1.70 Bn

¥1.92 Bn

+12.5％

Proﬁt Margin (%)

49.2%

51.6%

52.4%

+80bps(1)Operating Proﬁt-¥0.38 Bn-¥0.39 Bn-¥0.43 Bn-¥0.04 Bn

Proﬁt Margin (%)-10.2%-12.0%-11.9%+10bps(1)Notes:
1. 100bps = 1%; The same applies to subsequent slides.

QoQ

5Sales Highlight
Overcoming a downward trend caused by the voluntary recall of certain products (Q3 FY2024), net sales have returned to a growth pathmainly due to reinforced sales promotions and enhanced product strengths. In particular, in-house EC sales rose YoY as well, and retail sales
per store increased, conﬁrming a favorable recovery trend.
(Million yen)

In-house EC

RetailExternal EC

Global6

Sales by Channel (In-house EC & External EC Platforms)
Although in-house EC had diﬃculties improving customer acquisition eﬃciency, enhanced product strengths improved the churn rate andpurchase price, resulting in Q1 sales of ¥2.30 billion (+7.1% QoQ). External EC sales showed a growth of +13.4% QoQ due to the resumptionof advertising.

Increase in In-house EC Subscribers(1)EC Sales by Channel(Million yen)

217k

(3)

Remained in the 6% range despite
re-intensiﬁed acquisitions of new customers

Monthly averagepurchase price(2)201k

FY24 Q4
approx. ¥5,100

FY25 Q1

Image of monthly new
acquisitions

approx. ¥5,300

Acquisition improved in
the second half of Q1

103k(ref. Q1 FY2024)

.
m
su

/Q
1
25

/Q
4
24

/Q
3
24

/Q
2
24

/Q
1
24

/Q
4
23

/Q
3
23

/Q
2
23

23

/Q
1

approx. ¥5,000

Notes:
1. Actual monthly increases in subscribers (cancellations taken into account).
2. Average ﬁgure for each ﬁscal quarter (Q1: Mar. to May), (Q2: Jun. to Aug.), (Q3: Sep. to Nov.), (Q4: Dec. to Feb. next year). Monthly average purchase price = Monthly subscription sales / Monthly subscribers
3. The 3-month average of monthly cancellations / previous month’s subscribers.

7

Sales by Channel (Retail Channel)
As for the store network, the major CVS chains maintained a high distribution rate. Sales per store increased due to new product releases andproduct renewals matching the peak demand period for breads. As a result, Q1 retail sales were ¥1.08 billion (+18.6% QoQ).

Store Network（1）Expansion Opportunities
Total Storesin JapanNo. of Stores

CVS

50,808

Number of stores of thethree major CVS chains
increased slightly

Distribution
Rate(5)

2
4

81.5％

55,810 (2)-1.3pts QoQ

Q4 FY2024 approx.

Q1 FY2025 approx.

¥5,950¥6,950(ref. Q1 FY2024) approx.

Drugstores

22,621 (3)Monthly Sales per Store（6）¥8,80018.9％

Change factors :+0.4pts QoQ● Arrival of peak demand period (spring
season) for breads

Supermarkets

23,028 (4)● Launch of new products (BASE BREAD

3.7％+1.3pts QoQCurry, Tuna/Sausage)● Increased sales volume of renewed
products

Notes:
1. The number of stores which stocks our products.
2. The total number of stores on an all-store basis from the "Convenience Store Statistical Survey Monthly Report August 2023" by theJapan Franchise Chain Association.
3. The store count summary of regular members as of June 2023 from the Japan Chain Drug Store Association.

4. The number of supermarket stores as of December 31, 2022, from the National Supermarket Association.
5. As of the end of May 2024.
6. Quarterly average. Monthly sales per store = Monthly sales of the entire retail channel / Number of stores.

8

Overseas Sales
While overseas business is performing well, led by Hong Kong, we will place priority on achieving proﬁtability for the current ﬁscal year and thus
conduct investments in overseas business by considering the overall proﬁtability of our operations.
Trends in Quarterly Volume of Bags Sold
Unit: 10,000 bags

Q1 Summary
Hong Kong

Expansion Stage● Accumulated number of bags soldexceeded 500,000 at the end of April

China

Validation Stage● Although new sales platform
establishment faced challenges due toregulations, revenue remained steady● Characteristically, many users buy inbulk, and the number of bags per

Popular Among the Working-Age Demographics(1)

purchase is more than double that inJapan● Sales composition of the in-house EC isstable at over 70%

31.8%

20.5%

● Marginal proﬁt ratio improved due tomore eﬃcient delivery operations

9.1%
Male 52.3%

Female 45.5%

31.8%

20s〜40s（N/A 2.3% ）~29 y/o

30s

40s

50s

60s~

Taiwan & Singapore

Validation Stage● Undergoing cost-eﬀective veriﬁcation
while balancing with the current
customer acquisition eﬃciency

U.S.

Preparation Stage● Regulations on raw materials causedslight delays, but launch is targetedwithin the ﬁscal year

NA

Notes:
1. Based on the questionnaire results for users after subscription purchases on the Hong Kong in-house EC.

9Proﬁt Highlights
Gross margin improved to 52.4% in Q1 as deteriorating factors (such as temporary disposal of products and raw materials) caused by thevoluntary product recall were resolved in the previous quarter. Operating margin stood at -11.9% due to strategic advertising investments, as
we assumed initially.

Gross Margin

Operating Margin

Price
increase

Voluntary
recallRaw material costs soared

10Factors of Proﬁt Changes (QoQ)
Q4 FY2024 (Actual)

Q1 FY2025 (Actual)
Change Factors

Amount% of net sales

Amount% of net sales

Cost of Sales¥1.60 Bn /48.4%

¥1.74 Bn

/ 47.6％

Improved as a result of deteriorating factors (such as
temporary disposal of products and raw materials) caused by
the voluntary recall resolved in the previous quarter

Packing andTransportation Cost(1)¥0.39 Bn /12.0%

¥0.42 Bn

/ 11.5％

Improved with optimized delivery partners

Transaction Fee¥0.11 Bn /3.4%

¥0.12 Bn/

MarketingExpenses¥0.86 Bn /26.2%

¥1.00 Bn

/ 27.3％

Deteriorated as a result of intensiﬁed sales promotions timed
to match the peak demand period, as planned

Personnel
Expenses¥0.39 Bn /11.8%

¥0.42 Bn

/ 11.7％

Increased due to new hires, but the percentage of net sales
remained ﬂat

Other Expenses(2)¥0.33 Bn /10.2%

¥0.38 Bn

/ 10.5％

Although expenses related to new products and productrenewals increased, the percentage of net sales remained ﬂat

Operating Proﬁt-¥0.39 Bn / -12.0%

Notes: Accounts are based on managerial accounting.
1. Includes warehouse and personnel expenses.
2. Research and development expenses, outsourcing and commission expenses, etc.

3.4％

-

-¥0.43 Bn / -11.9％
11New Product Launches and Renewal Achievements
Launched 6 new products (previous year: 2 new products) and 2 renewals in Q1. From Q2 onwards, will accelerate growth through new
product launches and renewals, with a focus on the BREAD series, which is a top-selling category.

New Products Launched: 6 in total

Product Renewals: 2 products in total● BASE FOOD Deli

● BASE BREAD Mini Toast - Plain/Raisin
Contribute to the
expansion of thedining scene andcustomer baseTarakoCreamy Mushroom

After the renewal(1),Favorable rating for Plain +12.4pts
Favorable rating for Raisin +7.1pts

Sauce “Yakisoba”● BASE BREAD Tuna and Sausage*Only Available at CVS in Tokyo● "Raisin" gained more
subscribers and increased in
popularity, only to follow the
top 3 most popular regular
products● Retail sales of Raisin also
increased● BASE Pancake Mix
Preferred by users in their 30s andolder, as well as households
raising children and those livingwith a partner
Notes:
1. Comparison of the results of the internal customer survey before the renewal (Jan. 2024 - Mar. 2024) and after the renewal (Mar. 2024 - Jun. 2024).

● Its high popularity, especiallyamong people in their 40s and
50s, helps expand the user base

12

Strengthened Initiatives on Quality Assurance
In Q1, we yielded results in the development of dough aimed at improving its bacteriostatic properties. Our quality assurance initiatives,
which have been strengthened since 2H of FY2024, are steadily proving eﬀective, further enhancing our protective capabilities.

1. Product Design

2. Manufacturing Process

3. Product Labeling

Major Update

Although the dough has acertain bacteriostaticeﬀect, it has been updated
to make it more resistantto bacteria growth, even if
some bacteria adherenceor packaging damage
should occur. Renewalscheduled from late June
2024 Production(1)4. Packaging

Monthly bacterial
monitoring system wasadopted in Feb. 2024 at all
BASE BREAD outsourced
factories to continuously
track their sanitaryconditions

5. Quality Assurance
Updated the package
materials and redesigned
the seals of BASE BREAD(1)to prevent defects anddamages as well as toimprove inspection
accuracy

Started full inspections at
our own warehouses in Dec.
2023 to enhance quality
assurance, in addition to
those already conducted at
outsourced factories

In accordance with theFood Labelling Act, etc.,
each department checks
raw materials and productlabelling, and the Quality
Assurance Department
performs ﬁnal
conﬁrmation to prevent
omissions andmisrepresentations

6. Transportation
Changed the packaging
format in Nov. 2023 tofurther minimize the risk of
breakage duringtransportation, ensuring
greater resistance tovibration and load

Notes:
1. Renewals are planned to start for “BASE BREAD Maple” and “BASE BREAD Plain” (with those produced in late June 2024), “BASE BREAD Chocolate” and “BASE BREAD Cinnamon” (with those produced in early July 2024), and “BASE BREAD Curry” (with those produced in earlyAugust 2024), sequentially.

13

Strengthened Initiatives on Quality Assurance
The renewals in late June will improve the texture and ﬂavor of the dough, as well as its bacteriostatic properties, making it more resistant to
the growth of bacteria, even if a certain level of bacteria adherence or packaging damage should occur(1). Purchase intention results forrenewed products are also favorable, allowing expectations for positive eﬀects on new customer acquisitions and retention rates.

Taste Rating(2) *0~10 point rating
Average SKU performance+0.4 points UP!!
Purchase Intention(2）*0~100% rating

Average SKU performance+12pts UP!!
Especially, the most popular “Chocolate”
gained:‧Taste Rating: +0.8 scores‧Purchase intention: +25pts
and is expected to contribute to earnings
with such a high evaluation
Notes:
1. For more details on the renewals(Japanese only), see https://basefood.co.jp/news/1798
2. Results of a sensory evaluation conducted with Ajinomoto Co., Inc. in a business tie-up.

14

Balance Sheet
Strategic investments led to a decrease in net assets. On the other hand, we have a stable and ﬂexible funding means for cash as we haveconcluded overdraft agreements with multiple banks. In addition, as disclosed on July 16, we will procure ¥500 million in a long-termloan from MUFG Bank, Ltd.(1), to strengthen our ﬁnancial stability.

Short-term loans
500
Cash and deposits
1,430

Short-term loans
1,900
Cash and deposits
2,583
Other current liabilities
1,903

Other current assets
1,240
Non-current liabilities 30
Non-current assets
605

Net assets
842

As of the end of Q4 FY2024
Notes:
1. Details on the long-term loan are described in “Notice on borrowing of funds through long-term loans” (timely disclosure) dated July 16.

Other current assets
1,194

Non-current assets
657

Other current liabilities
2,047

Non-current liabilities 33
Net assets 454

As of the end of Q1 FY2025
15

Part 2

Forecast for FY2025

16

Sales Forecast for FY2025
Although the recovery was slower than expected in the ﬁrst half of Q1, growth accelerated in the second half. We aim
for further growth with new launches in our mainstay BASE BREAD series and major renewals of popular products.
FY24 Full Year (Actual)

FY25 Full Year (Forecast)

Key points for attaining the forecast

Q1 FY25 (Actual)

Overall● Revised product strategy for FY2025. Changed direction to focus
resources on the mainstay BREAD series.

3.66 Bn

In-house EC

Image of monthly● Aim to achieve purchase price growth and limit the impact of churndue to price revisions by strengthening products andservices/functions (LTV improvement measures).

¥

Net Sales¥14.87 Bn

19.06 Bn¥sales trend
March

April

● Create momentum for new customer acquisition through productpromotions.

○ The price revision was announced in June, but churn iscurrently lower than expected. The impact is expected toreappear in August when prices are revised, but will minimize
churn by above measures.
RetailMay● With upcoming new products and major renewals planned for
2H, we aim to further increase the favorable sales per store.
● Developing new sales channels other than retail outlets to increase
sales.

Notes:
1. For more details on the price revisions(Japanese only), see: https://basefood.co.jp/news/1770

17

Proﬁt Forecast for FY2025
Operating proﬁt in Q1 was as expected, our plan to achieve proﬁtability through 2H remains unchanged. We will improve proﬁt
margin by implementing price revisions and cost reduction measures without delay and by ﬂexibly controlling ﬁxed costs.

Gross Proﬁt
Proﬁt Margin(%)

Operating
Proﬁt
Proﬁt Margin(%)

FY24 Full Year (Actual)

FY25 Full Year (Forecast)

Q1 FY25 (Actual)¥7.39 Bn

¥10.28 Bn¥1.92 Bn

49.7%

53.9%

52.4%

-¥0.90 Bn -¥0.16 Bn -¥0.43 Bn-6.1%-11.9%
0.8%

Expected trend of cost ratios from Q1 to FY2025 end

Cost of sales

Imp

Expected to improve from Q1 due to approx. 10%
increase in product price scheduled for August
and cost reduction measures to be implemented
in 2H

Packing andtransportation
costs(2)Imp

Expected to improve from Q1 due to more
eﬃcient inspection work

Transaction fee

Stay ﬂatrove

Marketingexpenses

Imp

Personnel
expenses

Imp

Other
expenses(3)Notes:
1. For more details on the price revisions (e.g. revision rates, products subject to price revisions, etc.)(Japanese only), see：https://basefood.co.jp/news/1770
2. Includes warehouse and personnel expenses.
3. Research and development expenses, outsourcing and commission expenses, etc.

rove

rove

rove

Stay ﬂat-

Expected to improve from Q1 by increasing theretail sale ratio and reducing investment in 2H
Expected to improve from Q1, as new hiring
required for business growth has largely been
completed and future hiring will at a slower pace
Expected to remain largely unchanged from Q1,
with respective costs ﬂexibly controlled

18Part 3

Our Mission＆Our Future Growth19Social Issues in Japan
Extension of Healthy Life Expectancy

Less Time Spent for Meal Prepration

Improvement in Nutritional Balance

Increase in Social Security Expenses(1)Increase of Dual-Income Households(3)(4)

Dietary Imbalance(6) in Daily Nutrient
Intake for Adult Men

We aim to reduce social security beneﬁt expenses byextending healthy lifespans¥

24.9Tn¥¥78.4Tn132.2Tn

6.14 Million
households

9.42 Million
households

Copper

12.4 Million
households

Vitamin D

ZincVitamin E

Iron

1980

2000

2020

Gap between life expectancy and healthy life
expectancy (2)Nutrient < 100%

Vitamin A

1980

2000

2020

Increase in people who don't want to spend
much time on cooking(5)Vitamin K

Phosphorus

Vitamin B1

Magnesium

Vitamin B2

Calcium（Unit: age）

NiacinPotassium

Vitamin B6

Vitamin C

12.68 years

Pantothenic Acid

Vitamin B12
Folic Acid

9.13 years

Male

Female

1990

2005

2020

Notes:
1.
"The Financial Statistics of Social Security in Japan Fiscal Year 2021." by the National Institute of Population and Social Security Research.
2.
Average life expectancy (2010) based on "The 22nd Life Tables" by the Ministry of Health, Labour and Welfare of Japan. Healthy life expectancy (2010) is based on the "Future Projection of Healthy Life Expectancy and Cost-Eﬀectiveness of Lifestyle Disease Prevention," a
research funded by the Health Labour Sciences Research Grant.
3.
Figures for 1980 and 2000 are from the “Special Survey of the Labor Force Survey” by the Statistics Bureau of Japan, and ﬁgures for 2020 are from the “Labor Force Survey (Detailed Tabulation) (Annual average)” by the Statistics Bureau of Japan.
4.
Households in which both the husband and wife are employees in sectors other than agriculture and forestry.
5.
In the ”Lifestyle Stationary Measurement Report 2020” by Tokyo Gas Urban Life Research, the percentage of people who answered either A or likely A in a question regarding cooking of: ”A. Not taking time for cooking” or “B. Taking time for cooking.” The survey covered
3,991members of the Tokyo Gas Urban Life Inquiring Points (TULIP), who are over the age of 20 and live in Tokyo, Kanagawa, Chiba, and Saitama Prefectures.
6.
The % of nutrient intake for each nutrient = the average nutrient intake for males of 20-29 years old males in 2019 (based on the "National Health and Nutrition Survey, Nutrient Intake Status Survey" conducted by the National Institute of Health and Nutrition) / therecommended or reference nutrient intake levels for males aged 18-29 (based on the "Dietary Reference Intakes for Japanese (2020 Edition)"by the Ministry of Health, Labour and Welfare)20Why BASE FOOD?
BASE FOOD accurately meets the high demand for convenient and aﬀordable balanced meals

Top 3 Preferences for Meals(1)Why Users Continue to Choose BASE FOODn = 459 (multiple answers allowed), 1,059(2) answers received

Like better than othercompanies’ product

8%
14%

33%

17%
24%

Notes:
1. Page 3 of the “Consumer Survey (July 2022)” by the Japan Finance Corporation (The survey covered 1,000 males and 1,000 females on their 20s through 70s in Japan. Up to two responses were permitted for the question of "Choose the answers that best represent yourcurrent food preferences.")
2. Covered 459 subscribers as of September 21, 2022, with the question of ”Why do you subscribe to BASE FOOD?”

21

Healthier Lives with Nutritionally Complete(1) Staple Food
BASE BREAD Nutrients (2)Made of Plant-Based Ingredients(3)% Relative amount of nutrients required per meal

100%

Whole Wheat

Soy

Glutinous rice

Whole Grain Rye

Chia seed

Kelp

0%

Swap out Lunch, Swap in BASE BREAD for a “Well-Balanced” Meal with Essential Nutrients Anywhere(4)✔ Low Fat ▲ Low Carb
▲ Low salt

▲ Nutritious

Nutrient < 100%

✔ Low Fat
✔Low Salt✔Low Carb✔Nutritious

Example of a meal deemed “well-balanced”

BASE BREAD (1)Notes:
1. One meal (1 package for BASE PASTA, 2 packages for BASE BREAD, 4 packages for BASE cookies, and 1 package for BASE FOOD Deli) includes 1/3 or more of the daily criterion value of all nutrients except for fatty acid, saturated fatty acid, carbohydrate, and sodium, which may
be overdosed with other meals
2. Nutrients assuming intake of two packages of BASE BREAD Plain for one meal
3. Nutritional value of BASE BREAD Plain, assuming to eat 2 packages per meal. One-third of the criterion value of nutrients for a day (aged 18 or older, criterion calories of 2,200kcal; Consumer Aﬀairs Agency)
4. Relative amount of nutrients required per meal, based on the criterion value indicated in Note 2 (Aged 18 or older, criterion calories of 2,200kcal; Consumer Aﬀairs Agency)
5. Total nutrients of cereals, rice, [wet rice], polished rice, and non-glutinous rice of 200g; ﬁsh and shellﬁsh/<ﬁsh>/ (salmon and trout), grilled chum salmon of 80g; vegetables/eggplant/boiled eggplant of 70g; vegetables/spinach, annual average of boiled spinach of 70g ;seasoning
and spices/<seasoning>/(miso)/instant miso/powder of 8g; according to Standard Tables of Food Composition in Japan, 2020 (Eighth Revised Version) by Resources Research Committee, Council for Science and Technology, Ministry of Education, Culture, Sports, Science andTechnology

22

Growing Domestic Markets
The top 2 barriers to a healthy diet are "troublesome" and "no time."

Potential Target Market

With our updates of products and services, our target market will expand.

Approx.
Domestic staple &Ready-Meals market size

Approx.

6.26trillion¥

1.13 Tn

NoodleApprox. ¥BreadApprox. ¥Pasta

1.58 Tn
80 Bn

Approx. ¥1.05 Tn

SnacksApprox. ¥

Ready
Meals

Approx. ¥2.42 Tn% of Health Conscious
Population（1）% of population notplanning to improvedietary habits

38%

6.2 TnCore Target Market
Approx.

3.8

Tn

Approx.

% of population willing to
improve dietary habits

Approx.

2.7

Tn

18%

Approx.

% of population already
improving dietary habits

43%

Approx.

FY2024 Net Sales¥14.8 billion

Notes:
1. Compiled by BASE FOOD based on the "Summary of the Results of the National Health and Nutrition Examination Survey (October 2020)" (p. 6) by the Ministry of Health, Labour and Welfare. For the question of "Are you thinking about improving your eating habits?," thefollowing
answers were provided for choices; "I am not interested in improving my eating habits," "I am interested but do not intend to improve," "I intend to improve (generally within 6 months)," "I intend to improve in the near future (generally within 1 month)," "I have already beentrying
to improve (within 6 months)," "I have already been trying to improve (more than 6 months),", and “I have no problem with my eating habits and do not need to improve them." The respondents were 5,674 Japanese nationals in their 20s or older.

23

Addressing Health Inequalities is a Signiﬁcant Global Agenda
FAO (Food and Agriculture Organization of the United Nations) has set a goal that by 2050, all humans will not only be able toconsume the "minimum nutritional requirements" for daily living, but also have a "nutritionally balanced diet" in line withnational dietary guidelines.

Source：© FAO. 2023. Achieving SDGs 2 without breaching the 1.5 °C threshold: A global roadmap.（https://www.fao.org/interactive/sdg2-roadmap/en/）24

Expansive Global Markets
First, we'll expand into countries facing similar social issues as Japan's or those highly receptive to food-tech, aiming for a world
where a healthy and sustainable lifestyle is accessible to all.
Market Size（2021）

China

JPY

JPY

Japan

660 BnJPY

20 Bn

2,740 Bn
US

Hong Kong

Aim toenter
in FY2025

Japan

Hong Kong

China

TaiwanSingaporeUSand worldwide…

Expansion
FY17

FY23

FY24

FY25

FY26

FY+X
25

R&D Strategy
Our R&D team, consisting over 40% of full-time employees, is working on "speedy product development and renewals", "improving taste","product eﬃciency" and "enhancing quality assurance". Proactively invest in deep and digital technology as a driver to accelerate businessgrowth and propel mission accomplishment.
Timely share user
analysis andproduct reviews

PDCA

Understand user needs
and produce
prototypes rapidly

Protein texture manipulation techniques
using molecular and microbial engineering

Speedy ProductDevelopment
Expand target users, improve and Renewals
customer retention andre-acquisition rates‧Review of formulations andstreamlining of production processes‧Manufacturing innovations and DX

Improving
Taste

R&D teamaccounts forover 40%out of all full-time employees

Production
Eﬃciency

Potential for cost reduction in all products

Enhancing
Quality
Assurance

Achieve a taste comparable to or
better than
non-nutritionally-complete products‧Technologies and know-hows to extend
expiration date while handling naturalingredients.

‧Digitize quality assurance operations

Achieve quality assurance that exceeds
industry standards
26Social Impact
Contributions to Sustainability

Reducing Health Inequalities

By incorporating waste bran and plant-richprotein ingredients, we can contribute to the
reduction of CO2 emissions

By reinforcing R&D innovation, we can provide
better products to households and regions inpoor nutrition balance, creating a healthy andsustainable lifestyle accessible to all.

TOP5 solutions to reduce CO2 emissions（1）The undernourished population exceeds
700 million globally（2）Refrigerant
Management
Onshore Wind
Turbines
Reduced Food
Waste

Providing Emergency Rations
The distinctive social value proposition we oﬀer as a
“Nutrition Infrastructure” company

Bread（in Million People）

Long-life
Nutritionally Complete

Plant Rich
Diets

Tropical Forest
Restoration

Disaster Resilience・Storable
・No need of electricity, gas, or water・Easily secure nutrition even in
emergent situations where nutrition
tends to be inadequate

Notes:
1. Paul Hawken. Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming. 2017. The term CO2 (carbon dioxide) refers not only to carbon dioxide itself but also encompasses all greenhouse gases converted to carbon dioxide equivalents based on their global
warming potential (GWP), including methane, nitrous oxide, CFC-12, HCFC-22, and other gases with minor impacts.
2. Food and Agriculture Organization of the United Nations（FAO）.FAOSTAT：Suite of Food Security Indicators. Last Updated: 2023/08/23. https://www.fao.org/faostat/en/#data/FS

27

Business Model28

Business Model(1) Timely user and feedback analysis, (2) Agile in-house R&D, (3) Conﬁdential mass production by manufacturing mixed ﬂour and products at
separate business partners, and (4) Strong omni-channel strategy utilizing EC and retail channels(1) Timely user andfeedback analysis

New Products Development
and Product Improvement(2) Agile in-house R&D

R&D(3)Ensuring production conﬁdentiality by
dividing reliable OEMs (original
equipment manufacturers) and mix ﬂourmanufacturers

Prototypes

Mass Production

Mixed Flour
Manufacturers# of reviews from in-house EC

Bread
4 OEMs13,651(Mar. 2022 May 2024)(1)

New Ideas+Prototypes# of reviews fromexternal EC platforms (2)Amazon Approx. 8,300
Rakuten Approx. 13,000

Yahoo!

Approx. 900

OEMPartners

In-house(4) Strong omni-channel strategy utilizing EC and retail channels

DeliveryIn-house
Warehouses(4)Marketing and sales through several channels

In house EC（Kanagawa/Osaka）

External EC platforms

AmazonFactory A（Mixed Flour a）

Production of
mixed ﬂour
diversiﬁed at
multiplefactories(3)Outsource

RakutenYahoo!
Cookie2 OEMsOutsource to
Delivery Service
Providers2
9 Digital Marketing‧TVCM

RetailConvenient Stores
Know-howsaccumulated
for over 5
years.

Pasta
2 OEM
Factory B（Mixed Factory b）

Drugstores
Supermarkets
etc.

Notes:
1. After the recall of certain products, the review aggregation was temporarily suspended between Nov. 5, 2023 and Jan. 17, 2024.
2. The cumulative reviews for BASE BREAD 4 Flavor 16 Bag Set, BASE BREAD 4 Flavor 20 Bag Set, and Chocolate 16 Bag Set as of the end of Feb. 2024.
3. One meal (1 package for BASE PASTA, 2 packages for BASE BREAD, 4 packages for BASE cookies, and 1 package for BASE FOOD Deli) includes 1/3 or more of the daily criterion value of all nutrients except for fatty acid, saturated fatty acid, carbohydrate, and sodium, which
may be overdosed with other meals.
4. As of the end of Feb. 2024.

29

Developing New Market by Expanding Product Lineups(1)Broadening our product portfolio through stronger R&D team and releasing new products to drive growth.
BASE BREAD

BASE PASTA & Deli

BASE Cookies & Others

First launched in Mar. 2019 (2)First launched in Feb. 2017 (2)First launched in June. 2021 (2)90.4%

Sales Ratio (3)Sales Ratio (3)

5.0%

4.6%

Sales Ratio (3)Product Roadmap since FY2022
There are no products that sell only temporarily due to temporary factors, and sales steadily increase each time a new product is introduced or renewed.
2023

2022

~2021

PASTA
BREAD

2024

〇
v6

■
v3

■
v5

■
v4

Cookies■：New Product〇：Product Renewal

■
v6

■
v1

■
v2

〇
v7

〇
v8

Deli

■
v1

■
v1

■
v1

〇
v9

■
v1

〇
v3

■
v1

Pancake Mix■
v1
Notes:
1. One meal (1 package for BASE PASTA, 2 packages for BASE BREAD, 4 packages for BASE cookies, and 1 package for BASE FOOD Deli) includes 1/3 or more of the daily criterion value of all nutrients except for fatty acid, saturated fatty acid, carbohydrate, and sodium, which may be
overdosed with other meals.
2. The months BASE BREAD, BASE PASTA and BASE Cookies were ﬁrst launched as a product.
3. Sales ratio of BASE FOOD series (except sales of source) in in-house EC in FY2/2024.

30

(Reference)Comparison of In-House EC and Retail Channel
In-house EC keeps the cost of sales (COS) ratio in the late 30s, allowing for a high gross margin. However, it incurs a relatively higher SG&A
ratio due to user acquisition and product delivery on our own. Conversely, the retail channel has a higher COS ratio but a signiﬁcantly lower
SG&A ratio, resulting in higher operating margin.

Cost Structure Comparison by Channel(1)COS Ratio Trends by Channel
Despite a recent rise in retail sales, which might appear to have negatively
aﬀected the COS ratio, ongoing enhancements in both retail and in-house
EC are driven by ingredient reduction through a review of formulations andimproved manufacturing eﬃciency.
(3)

(3)

Optimization of
packing
procedures
Temporary setback due
to disposal waste
Price Increase(2)

Rise of raw material
costs

Notes:
1. Represents the sales ratio for each category, based on management accounting, with both in-house EC and retail sales set at 100 as a reference.
2. Excludes ﬁxed expenses (personnel expenses, research and development expenses, and others).
3. Average values for each accounting period.

31

Customer Insights

32

Customer Base #1
Popular Among the Working-Age Demographics (1)Male 32.6% Female 61.5%

Over 75% Purchase for Weight-Loss and Health (1)（N/A 5.9% ）

0.4%
2.6%

2.0%

3.0%
6.5%

Weight loss andhealth purpose

20 - 49 year
olds
（%）

（%）

Notes:
1. Based on 163,346responses from the user survey conducted in Jul. 2020 through May. 2024

33

Customer Base #2
We are reaching a broad range of customers, primarily those who lead busy lives but aspire to maintain a healthy diet.
Real User Proﬁle (1)ProﬁleName： A Age： 20s/Female
Occupation：Oﬃce Worker
Purpose： Diet/Training

Name：B Age： 30～40s/Female
Occupation：Oﬃce Worker
Purpose： Training/Kids healthy meal

Name：C Age： 40s/MaleOccupation：Oﬃce worker
Purpose： Metabolic Syndrome Prevention

How they spend the day
Either works or does chores from 9AM to 5PM. Her son has BASE BREAD
as after-school snacks. In the evening, she goes for a run 2-3 times a
week. After her daughter comes home from school, heads to cramschool after a quick dinner.

Wakes up at 7 AM, heads to the gym ﬁrst thing, then getsready for work. Drinks protein at noon, eats a hamsandwich between 2-3 PM. If working overtime, eats BASE
FOOD.

Starts working from 7AM to 7-8 PM. After work, makes dinner andexercise for about 1 hr on weekends. On weekends, wakes up
around 9 AM and exercises for about 2 hrs.

The timing they consume BASE FOOD during the day
No ﬁxed time. Either morning or noon, as there's no free time in theevening.

Eats twice a week when working overtime. Her husband alsobuys BASE BREAD from 4 to 5 times a week.

Usually eats for breakfasts, along with two cups of coﬀee and 100 calories
of peanut butter.

How long they have purchased BASE FOOD
Started purchasing 24 meals around March 2020, intended for
consuming on workdays at the oﬃce.

Started purchasing for herself around March 2021 but soon found it
convenient as a light meal for her 15 y.o. daughter.

Started purchasing around 2019, when the BASE BREAD was stillfrozen.

The motivation to start BASE FOOD

Noticed her colleague eating BASE BREAD for lunch which attracted her
at ﬁrst. After visiting the website to learn more, decided to try as she
prefers high-protein-low-carb food to stay active. Also the oﬀer forﬁrst-time buyers also led to an immediate purchase.

Found it on Instagram ads. She used to buy meals from the convenience stores
during work but was concerned about food additives. While contemplatingthese issues, she learned about this protein-rich bread on Instagram anddecided to buy it online.

Initially, started eating when diagnosed with metabolic syndrome. He
decided to replace staple food with BASE FOOD hoping it would improve
his diet. He continued this diet and was able to lose 12.3 kg in 1.5 yrs.

Notes:
1. Excerpts from interview data of A (Jul. 15, 2020), B (May 31, 2021), and C (May 31, 2021).

34

Disclaimer
This document (including annual guidance) is created by BASE FOOD, Inc. (referred to as the “Company”) solely for informational
purposes only and is not intended to solicit investment in the Company.
This document contains forward-looking statements and has been prepared by the Company based on reliable information available atthe time. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to diﬀermaterially from those expressed in or suggested by the forward-looking statements. Therefore, you may not rely entirely on
forward-looking statements. The Company does not assume any obligation to change or correct any forward-looking statements in lightof new information, future events or other ﬁndings.
This document includes information derived from or based on third-party sources as cited herein and the Company has notindependently veriﬁed and cannot assure the accuracy or completeness of any information derived from or based on third-party sources.
This document is an English translation of the original Japanese language document and has been prepared solely for reference
purposes. No warranties or assurances are given regarding the accuracy or completeness of this English translation. In the event of any
discrepancy between this English translation and the original Japanese language document, the original Japanese language document
shall prevail in all respects.

35