Supplementary Material for

FY2023 Q2 Financial Results

June 13, 2023

◤◤ Contents⚫ Consolidated Financial Highlights

2⚫ Gyomu Super Business4⚫ Outline of Gyomu Super Franchise Agreement5⚫ Changes in Total Number of Gyomu Super Stores

6⚫ Year-on-year Changes in Product Shipments to Gyomu Super Stores

7⚫ Kobe Bussan’s Strengths: “Unique Products with Competitive Advantages”

8⚫ Restaurant & Delicatessen Business9⚫ Eco Renewable Energy Business13⚫ Shareholder Returns

15⚫ Consolidated Financial Forecast

16

1◤◤ Consolidated Financial Highlights<Millions of yen>

<Millions of yen>

Net Sales

250,000

30,000

20.0%
15.9%

200,000

12.2%

20,000100,000
144,520

198,161

176,437

176,069

221,968

50,00015,00027,08922,959

16.0%

12.0%

21,57211.0%

24,51823,722<Millions of yen>

FY20 Q2

FY21 Q2

FY22 Q2

FY23 Q2

9.4%
8.3%

12,0009,000
13,635

4.1%

14,696

7,184

3,000

4.7%

4.5%
8,989

10,38410.0%

15,0008.0%

12,000

6.0%

9,000

4.0%

6,000

2.0%

0

0.0%

FY19 Q2

FY20 Q2

FY21 Q2

SG&A expenses
販売管理費

FY22 Q2

FY23 Q2

SG&A ratio
売上高販管費率

FY20 Q2

FY21 Q2

売上総利益
Gross profit<Millions of yen>

SG&A Expenses

8.0%

0.0%
FY19 Q2

FY19 Q2

12.0%

4.0%

10,000

0

6,000

15.4%

25,000150,000

15,000Gross Profit

FY23 Q2

売上高総利益率
Gross margin

Operating Profit
8.2%

6.5%

FY22 Q2

7.0%

10.0%
7.4%
6.4%

8.0%
6.0%

12,393

14,387

14,733

14,133

4.0%

9,324
3,000

2.0%

0

0.0%
FY19 Q2

FY20 Q2

FY21 Q2

営業利益
Operating profit

Note: Fiscal year (FY) represents the one-year period from November 1 to October 31 of the following year.

FY22 Q2

FY23 Q2

売上高営業利益率
Operating margin2◤◤ Consolidated Financial Highlights<Millions of yen>

<Millions of yen>

Ordinary Profit

18,00012.0%

15,00012,000

8.6%

5.9%

9,000
6,000

10.0%

8.3%

7.1%

6.6%

12,465

9,487

15,1908.0%
6.0%

16,38013,198

4.0%

3,000

2.0%

0

0.0%
FY19 Q2

FY20 Q2

FY21 Q2

経常利益
Ordinary profit

FY22 Q2

12,000

Profit Attributable to
Owners of Parent

FY23 Q2

売上高経常利益率
Ordinary margin

5.7%

9,000
4.2%

3,000

6.0%
4.1%

10,133
6,049

5.6%

4.3%

6,000

8.0%

11,037

7,546

4.0%
9,110
2.0%

0

0.0%

FY19 Q2

FY20 Q2

FY21 Q2

親会社株主に帰属する四半期純利益
Profit attributable to owners of parent

FY22 Q2

FY23 Q2

売上高四半期純利益率
Net margin[Financial Overview]⚫ Net sales
Net sales increased by ¥23,807 million (12.0%) year on year with robust new store openings and continued strong product shipments to existing
stores.
⚫ Gross profit
Gross profit increased by ¥795 million (3.4%) year on year due to the yen being weaker and raw material prices being higher than a year ago despite
the continued strong net sales.
⚫ SG&A expenses
SG&A expenses increased by ¥1,395 million (15.5%) year on year due to increases in freight costs for the Gyomu Super Business and personnel andrent expenses resulting from the opening of our directly operated BBQ restaurants.
⚫ Operating profit
As a result of the factors above, operating profit decreased by ¥599 million (4.1%) year on year
⚫ Ordinary profit
Ordinary profit decreased by ¥3,182 million (19.4%) year on year due to the recording of a foreign exchange loss on U.S. dollar-denominateddeposits and a valuation loss on forward exchange contracts resulting from the ongoing appreciation of the yen since the beginning of Q1. While
the valuation loss varies depending on the exchange rates at quarter-end, we expect the loss to be reversed by the end of FY2023.
⚫ Profit attributable to owners of parent
As a result of the factors above, profit attributable to owners of parent decreased by ¥1,927 million (17.5%) year on year.
3◤◤ Gyomu Super BusinessGyomu Super is our core business. Operating results of this business segment reflect wholesale sales to, androyalty fee from, Gyomu Super franchisees earned by Kobe Bussan, a franchisor (franchising headquarters), as wellas earnings of Kobe Bussan Group’s plants.

◼ Gyomu Super stores have expanded nationwide with 1,023
stores as of April 30, 2023.
◼ Net sales for FY2023 Q2 exceeded the planned amount.
◼ We have changed specifications of private label items producedby our group’s domestic plants and revised prices for national
brand items to address continuously rising costs caused
primarily by the soaring prices of raw materials.
Gyomu Super Hakodate Taya Store (Our 1000th store)<Millions of yen>

Net Sales(cumulative)<Millions of yen>
20,000250,000

16,000200,000

7.8%

Operating Profit(cumulative)
8.4%

9.2%

10.0%

8.6%
7.4%

12,0008.0%
6.0%

150,000
100,000
50,000126,760

157,586

173,596

193,532

215,111

8,000
4,000

13,30016,052

16,62015,822

9,928

2.0%

0

0.0%

FY19 Q2

0
FY19 Q2

FY20 Q2

FY21 Q2

FY22 Q2

FY23 Q2

4.0%

FY20 Q2

FY21 Q2

営業利益
Operating profit

FY22 Q2

FY23 Q2

営業利益率
Operating margin

Note: Due to a change in the reportable segment structure in FY2021, the figures for FY2020 are reclassified retrospectively to reflect the change.
4
Accordingly, the figures for these four years are not consistent with that for FY2019.

◤◤ Outline of Gyomu Super Franchise Agreement
We operate Gyomu Super stores under a franchise system except 3 stores of our own.
Our franchise agreement has 2 types as follows:• General franchise contract, which allows a franchisee to open 1 store in our directly managed areas (*1).
• Area franchise contract, which allows a franchisee to open multiple stores in a defined prefecture in our indirectly managed
areas (*2). Also, we own 3 stores in Hyogo and Osaka prefectures under direct operations.
関西直轄
228店舗

*1 Directly managed areas• Hokkaido area: Hokkaido prefecture• Kanto area:
Tokyo, Chiba, Kanagawa, and Saitama prefectures• Kansai area:
Osaka, Kyoto, Hyogo (excl. Awaji Island), Nara, Wakayama, and Shiga prefectures• Kyushu area:
Fukuoka, Saga, Nagasaki, Kumamoto, Oita, and Miyazaki prefectures

関東直轄
191店舗

Outline of Franchise Contract & Requirements

Simulated Earnings(as of April 30, 2023)(Standard Store Franchisees)

Directly managed areas

Indirectly managed areas

Number of franchisees

8815Type of franchise
agreement

Single-unit franchise(A general franchisee can open
1 store per contract.)

Multi-unit franchise(An area franchisee has an
exclusive right to open multiple
stores in a prefecture defined
under the contract.)

Initial franchise fee(excl. consumption taxes)¥2,000,000

Population in the prefecture x ¥2

Franchise deposit¥10,000,000

Population in the prefecture x ¥5

1% of total purchase of goods

1% of purchase of defined goods

Royalty fee

Facility expenses

Distribution expenses

It costs between ¥32 million and ¥38 million to construct racks for
shelf-stable foods and refrigeration equipment (the above
construction cost is a rough estimate and varies depending on
properties). Equipment, construction work, POS registers, and otherfunds for start-up are required separately.
Principally paid byfranchise headquarters

神奈川県
55店舗

東京都
64店舗

地方エリア
315店舗

*2 Indirectly managed areas• Other areas:
Prefectures other than those listed above

千葉県
33店舗

Negotiable

P&L accountMonthlyamountComposition

Net sales¥43,500,000

100.0％

Gross profit¥7,395,000

17.0％

SG&A expenses¥6,499,000

14.9％(Rent expenses)¥1,300,000

3.0％(Personnel expenses)¥2,393,000

5.5％¥896,000

2.1％

Operating profit* By purchasing items such as fresh food separately, many offranchisees operate more efficiently than the above simulation.

5◤◤ Changes in Total Number of Gyomu Super Stores
Number of Stores by Area

Gyomu Super opened 24 stores and closed 8,
resulting in a net increase of 16 stores during
FY2023 Q2 cumulative, and opened 17 stores andclosed 6 during FY2023 Q2 alone.
The progress at the end of FY2023 Q2 was 40%
toward the full-year target of a net increase of 40
stores.
(stores)

969 stores as ofApril 30, 2022

千葉県
33店舗

Hokkaido 21
Kyushu 63
Chiba

Kansai

46

258
Kanto
262

Saitama61

Kanagawa
74

Total Number of Gyomu Supper Stores

Other(cumulative)

Tokyo

365

81

1,050

1,047

1,023

1,000

1,023 stores as ofApril 30, 2023 (+54)

Hokkaido 31 (+10)

969

Kyushu 82 (+19)
Chiba

Kansai

950

52

262
(+4)

Kanto
275

Other

900
FY20222022年
Q2

FY2023
2023年
Q2

FY2023
2023年
Target

4月

4月

10月目標

373
(+8)

(+13)

Saitama(+6)

64

Kanagawa

(+3)

76
Tokyo

(+2)

83
(+2)

Directly managed areas: Hokkaido, Kanto, Kansai, and Kyushu
Indirectly managed areas: Other

6◤◤ Year-on-year Changes in Product Shipments to
Gyomu Super Stores◼ Product shipments for each month of FY2023 Q2 increased year on year even after the resumption ofbusiness as usual at restaurants and the lifting of movement restrictions.
<YoY Change(%)> [Existing Stores in Directly Managed Areas]<YoY Change(%)>

Monthly Trends for Product Shipments

110.2
110

125
109.9

109.1
106.8

107.2

105.6
105
100

Monthly Trends for Product Shipments

113.3

115

103.9

103.6

105.3

106.8

105.5
103.1

104.3
103.2
103.1
102.9

102.4

101.1

95
94.4

94.2
91.5

90

103.5

103.1

120

104.9

105.1

102.9

104.5

103.4

110
105

101.7

Decreased year on year because
the state of emergency announced
in 2020 increased eating-at-homedemand.

FY2022
2022年

118.6

120.1

119.9

115.3
112.5 113.2
115 111.6 112.5
112.0
111.8
111.2
110.0

113.6
110.8
111.5

110.3
110.5
110.3
109.3 108.6 108.3

100

102.4

95
Nov.
11月 Dec.
12月

Nov. 12月
Dec. 1月
Jan. 2月
Feb. 3月
Mar. 4月
Apr. 5月
May 6月June 7月
July 8月
Aug. 9月
Sept. 10月
Oct.
11月
FY2021
2021年[All Stores Nationwide]

Jan.
1月

FY2023
2023年

Feb.
2月
FY2021
2021年

98.9

Mar. Apr.
3月
4月

112.7

113.1

108.3
111.1
112.3
110.0

101.7
May
5月

FY2022
2022年

June
6月

July
7月

Aug.
8月

Sept. 10月
Oct.
9月

FY2023
2023年[Year-on-year % Changes in Product Shipments to Gyomu Super Stores]
FY2023

Directly
managedareas
Nationwide

Existing
storesAll
storesAll
stores

Products shipments toexisting stores in
directly managed areasfor each quarter alone

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

H1

105.6

107.2

103.9

106.8

103.2

106.8

105.6

Q1：105.7％

112.1

112.6

109.5

112.5

108.5

112.7

111.4

Q2：105.5％

111.6

112.5

109.3

112.0

108.3

111.8

111.0

Note: “Nationwide” represents the product shipments to the stores in both directly and indirectly managed areas.

7◤◤ Kobe Bussan’s Strengths:“Unique Products with Competitive Advantages”
Enhancing Original Products

Samples of Private Label Products

We own 25 food production plants located from Hokkaido to
Yamaguchi (as of April 30, 2023). The number is one of the largest inJapan’s supermarket industry. Our original products produced at theseplants are available only at Gyomu Super stores and enjoy strong
customer acceptance.

◼ Products produced by Kobe Bussan Group’s plants

Also, food products directly imported from approximately 50 countries
under the concept, “the flavors of the world, to Japan,” are popular with
consumers because they enjoy genuine taste of countries across theworld at reasonable prices at home.

Ratio of Private Label Products(cumulative period)
35%

Potato salad34.82%

Produced by our plants：11.3%
Imported：23.5%

34.74%

34.75%

33.01%

32.94%

34.47%
34.74%¥429 (500 g x 2)

Japanese Souffle
Cheesecake¥429 (1 pack)Natural Yeast
White Bread

French Mini
Croissants¥429 (240 g)

Broccoli¥278 (1 loaf)◼ Import products

34%
34.29%

33%

32.75%

33.12%

Tempe

32%
Q1
1Q
FY20212021年10月期

Q2
2Q
FY2022
2022年10月期

Q3
3Q

Q4
4Q

¥375 (450 g)¥181 (500 g)

FY2023
2023年10月期
Note: All prices include tax.
Products and prices are different depending on stores and seasons.

8◤◤ Restaurant & Delicatessen Business
The Restaurant & Delicatessen Business covers restaurants and delicatessen shops that we operate directly or as afranchisor (franchising headquarters). This business segment includes Kobe Cook World Buffet, a buffet-style restaurant
chain; Premium Karubi, a served a-la-carte buffet style BBQ restaurant chain; and Chisouna, a delicatessen shop chain.

◼

The existing restaurants of Premium Karubi remained
strong.

◼

Kobe Cook World Buffet is now back on track with theincreased numbers of restaurants and customers.

◼

Chisouna continued opening new shops.

As a result of the above, the segment performance
improved significantly.
<Millions of yen>

Kobe Cook World Buffet

Premium Karubi<Millions of yen>

Net Sales

Chisouna

Operating Profit(cumulative)(cumulative)
200

6,000
5,000

100

4,000

0

3,000

5,222

2,000

10.0%
4.4%

3.0%

1.2%
-89
48

17

-156

154

5.0%
0.0%

-2.8%

-100

-5.0%

3,238

1,000
1,088

1,462

1,601

FY20 Q2

FY21 Q2

FY19 Q2

0
FY19 Q2

-9.7%

-200

FY22 Q2

FY23 Q2

FY20 Q2

FY21 Q2

営業利益
Operating profit-10.0%

FY22 Q2

FY23 Q2

営業利益率
Operating margin

Note: Due to a change in the reportable segment structure in FY2021, the figures for FY2020 are reclassified retrospectively to reflect the change.
9
Accordingly, the figures for these four years are not consistent with that for FY2019.

◤◤ Restaurant & Delicatessen Business
Kobe Cook World Buffet
Total Number of Restaurants: 13 (as of April 30, 2023)

Kobe Cook World Buffet opened 2 restaurants and closed none, resulting in a netincrease of 2 restaurants during FY2023 Q2 cumulative, and opened 1 restaurant andclosed none during FY2023 Q2 alone.
We successfully acquired larger parties of guests during the season of welcome andfarewell parties.

Initiatives to Reduce Food Waste
Harborland Restaurant (located in Chuo-ku, Kobe-shi, Hyogo), which we directly operate, is anexperimental restaurant to work on various initiatives to reduce food waste. Since November
2021, after the last order of lunch and dinner hours, the restaurant has offered 50% discount at
a section in the restaurant designated for selling “by weight” at ¥1.30 (¥1.404 including taxes)
per gram. Such initiatives enhance customer satisfaction of any age and are currently introduced
into all the 13 restaurants.

Overview of FY2023 & Business Strategy
All our restaurants continue to see an increase in group demand thanks to a recovery in thenumber of tourists from home and abroad. Sales, especially in Harborland Restaurant, areapproaching the level before the COVID-19 pandemic.
Every season, we run marketing campaigns featuring cuisine of a selected country. In May andJune, we hold the “China Fair” to offer elaborate Chinese dishes such as happosai (Chinesevegetable stir fry like chop suey) and shumai.
Going forward, we continue to offer services that satisfy customers with the menu, volume of

Seasonal limited: “China Fair”

food and price unparalleled to any other restaurant chains.
10◤◤ Restaurant & Delicatessen BusinessPremium Karubi
Total Number of Restaurants: 19 (as of April 30, 2023)

Premium Karubi opened 3 restaurants and closed none, resulting in a net increase of 3 restaurants during
FY2023 Q2 cumulative, and opened 2 restaurant and closed none during FY2023 Q2 alone.
Despite the price revision as a measure against soaring purchase prices, a higher price range menu is also wellreceived.

Differentiation from Other Competitors

Grand Menu

What makes Premium Karubi different from other BBQ restaurants isthe best selected, perfectly aged meat and in-house made desserts
and gelatos. The restaurants offer new menus for each season sothat repeat customers can enjoy our meals. We ran a marketing

campaign titled “South Korea Fair” from March 7 to May 31.
Also, our dessert buffet uses seasonal ingredients every season.
From May, we are offering desserts such as mint chocolate chip andwhite peach gelatos, which are well received by customers.

Restaurants Opened during FY2023
Lake Town

5-1-2 Lake Town, Koshigaya-shi, SaitamaFuji

1 Takashima-cho, Fuji-shi, Shizuoka

Nakatomatsuri

828-18 Nakatomatsuri-cho, Utsunomiya-shi,
Tochigi

The first store in the Tokai area opened, which got a
lot of exposure to local media.

Note: Menus may vary by restaurant and season.

* We plan to open new restaurants onwards in phases.
11◤◤ Restaurant & Delicatessen Business
Chisouna
Total Number of Shops: 98 (as of April 30, 2023)

Chisouna opened 13 shops and closed 2, resulting in a net increase of 11
shops during FY2023 Q2 cumulative, and opened 8 shops and closed 2
during FY2023 Q2 alone.
A significantly increased number of shops helped improve its profitability.

Factors behind Strong Performance
Despite continuous soaring prices of raw materials, Chisouna
maintains a price advantage by working on price revisions, menuchanges, and improvement in cooking operations efficiency. In
addition, a strong synergy effect on attracting more customers to
Gyomu Super stores is accelerating the willingness of franchisees
to open new shops. The voluminous fresh homemade foods keep
attracting customers.

Recent Development
In May, we opened the 100th shop thanks to the steady progresswith new store openings. We achieved this in just six months
since we introduced this new format in a drugstore in December
2022 with favorable responses from franchisees and customers.

As such, we continue to expand the number of shops without
limiting those established in Gyomu Super stores.
Note: Products and prices may vary by shop and season.

12◤◤ Eco Renewable Energy BusinessWe provide eco-friendly, safe, and reliable renewable energy by operating solar andwoody biomass power plants.

◼ Net sales and operating profit for FY2023 Q2
increased year on year due in part to a solar
power plant in Nishigo-mura, Nishishirakawagun, Fukushima, which started operations inJune 2022.
◼ We plan to move up the schedule to start theoperations of a solar power plant in Miyagi witha generation capacity of approximately 30 MW in
November.
Net Sales<Millions of yen>

Kobe Bussan’s Solar Power Plant(Photo: Nishishirakawa Power Plant with the capacityof 18.9 MW, which started operations in June 2022)

Operating Profit<Millions of yen>(cumulative)

Kobe Bussan’s Woody Biomass Power Plant

500(cumulative)

400

18.3%

25.0%
20.4%

2,000
1,600

300

13.4%

20.0%

17.6%

15.4%
15.0%

1,200
200
800
1,151

1,192

1,234

1,388

332

1,630
100

400

154

183

226

244

5.0%

0

0.0%
FY19 Q2

0
FY19 Q2

FY20 Q2

FY21 Q2

FY22 Q2

FY23 Q2

10.0%

FY20 Q2

FY21 Q2

営業利益
Operating profit

FY22 Q2

FY23 Q2

営業利益率
Operating margin13◤◤ Eco Renewable Energy Business
Plant Locations

Solar Power:[Biomass]
Shiranuka-cho,
Hokkaido
6.2 MW

18 locations

51.0 MW

1 location

6.2 MW

Biomass:[Solar Power]
5 in Hokkaido
5.9 MW(as of April 30, 2023)[Solar Power]
1 in Shiga
0.5 MW[Solar Power]
4 in Hyogo
4.5 MW[Solar Power]
1 in Fukushima
18.9 MW[Solar Power]
1 in Fukuoka
0.9 MW[Solar Power]
1 in Ibaraki
2.4 MW[Solar Power]
3 in Osaka
14.2 MW[Solar Power]
1 in Tokushima
2.1 MW[Solar Power]
1 in Wakayama
1.6 MW

14◤◤ Shareholder Returns
Dividends<Yen>

Kobe Bussan regards returning profits to shareholders as one of key

Dividend per Share25

management issues. Our basic policy is to secure funds necessary forour business growth and distribute profits to shareholders according to20

the operating results.

21.5%

17.8%

22.1%

23.1%

23.0%

20%

15

For FY2022, we paid the annual year-end dividends of ¥22.00 per share,up ¥1.00 from the initial forecast of ¥21.00.

15%

10
5

For FY2023, we plan to pay the annual dividends of ¥22.00 per share.

0
Note: The figures in the graph on the right have been adjusted for the effect of

25%

20.00

22.00

22.00

15.00

5%

10.00
FY20192019年

the 2-for-1 stock splits carried out in November 2019, and November

FY2021
FY20202020年
2021年
Dividend per share
1株当たり配当金10%

FY2023
FY2022
2022年
2023年予想
TargetPayout ratio
配当性向(連結)

0%

2020.

Shareholder Benefit Program
The shareholder benefit program has been introduced to express Kobe Bussan’s gratitude for the continuous support of its shareholders
and to gain the deeper understanding of customers for its businesses. We will send JCB Gift Card to shareholders who hold 100 shares ormore as of October 31 of each year, according to the number of years of ownership and the number of shares held.
Shareholder incentives
Number of shares held

Continuous ownership years
Less than 3 years

Continuous ownership years
3 years or more

100-999

JCB Gift Card ¥1,000

JCB Gift Card ¥3,000

1,000-1,999

JCB Gift Card ¥10,000

JCB Gift Card ¥15,000

2,000 or more

JCB Gift Card ¥15,000

JCB Gift Card ¥20,000

Note: Shareholders may opt to exchange the gift cards for an assortment of private label products worth the face value.

Sample15

◤◤ Consolidated Financial Forecast
FY2023 Forecast
Q2 actual(Millions of yen)

Full-year forecast

Progress towards
Full-year forecast

Net sales

221,968

440,000

50.4%

Operating profit

14,13329,70047.6%

Profit attributable toowners of parent

9,110

21,20043.0%[Note]• The above forecast reflects the assumption that the weak yen against US dollar will continuingly
increase the cost of imported products as well as the costs of raw materials and infrastructure.
•

The full-year forecast has been determined to remain unchanged at the moment, considering
the recent currency movement.

Gyomu Super Business Guideline towards FY2023 Forecast
FY2023 target

Action plan

Target ofstore openings

Net increase of
40 stores

Open stores focusing on the Kanto and Kyushu areas under
direct management.
Strengthen property data-gathering capability driven byheadquarters.

Product
development

Rise in PB ratio

Focus on private label products developed by our groupplants and those imported directly by ourselves.
16• This material contains forward-looking statements based onassumptions, estimates, and plans as of June 13, 2023.

• Please note that actual results may differ significantly from theseforward-looking statements due to uncertain factors arising fromchanges in the economic climate.
• This material is not intended to solicit and encourage purchase ofshares.
• This material has been translated from the Japanese original forreference purposes only. In the event of any discrepancy between
this translated material and the Japanese original, the original shallprevail.

For information regarding this material, please contact:
IR-Public Relations, Kobe Bussan Co., Ltd.
ir@kobebussan.co.jp
17