Oisix ra daichi Inc.
Financial Results Briefing for the Fiscal Year Ended March 2024
May 14, 2024

Event Summary[Company Name]

Oisix ra daichi Inc.

[Company ID]

3182-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Financial Results Briefing for the Fiscal Year Ended March 2024

[Fiscal Period]

FY2024 Q4[Date]

May 14, 2024

[Number of Pages]

39[Time]

16:00 - 16:40(Total: 40 minutes, Presentation:31 minutes, Q&A: 9 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers][Analyst Names]*

1
Kohei Takashima

Representative Director, CEO

Hideki Sumi

Tokai Tokyo Intelligence Laboratory*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or
whose questions were read by moderator/company representatives.

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Presentation
Umemura: Now that we are at the appointed time, we will begin. Thank you very much for taking time out ofyour busy schedules today to join us for Oisix ra daichi Inc.’s financial results briefing for the fiscal year ended
March 31, 2024.
I am Umemura from the Corporate Planning Department, and I will be facilitating today's session. Thank you.
Today's financial results briefing will be divided into two major parts. In the first half of the meeting,Takashima, Representative Director and CEO, will give a 30-minute presentation on the financial results andour future growth strategy.
We will then move on to a Q&A session with participants in the second half of the briefing.
Now, let us move on to the briefing. President Takashima, please go ahead.
Takashima: Hello, everyone. Thank you for your time today.
This will be the first time that SHiDAX and Oisix ra daichi explain our financial results together. I would like totake about 30 minutes of your time to give you a thorough explanation, especially regarding the new group's
overall image. Thank you in advance.

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First, I would like to explain the structure of today's presentation in three parts: the results for the last fiscal
year, the growth strategy for the total Group of the new Oisix ra daichi and SHiDAX, and finally, the planned
figures for the current fiscal year.

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The first slide shows a report on our performance.
I know it's a bit wordy and a bit complicated. Let me explain.
In terms of the results for this fiscal year, sales were JPY148.4 billion, EBITDA was JPY8.25 billion, up 47% fromthe same period last year, and operating profit was JPY5.14 billion, up 54%. Net income was JPY4.12 billion,
which is a bit much, but this is quite irregular. We had some transactions in the consolidation process with
SHiDAX, and net income was recorded, which were temporary.
Then, in terms of comparison with the revised plan, one of the important issues in Q4 was to make the Atsugi
freezing station relocation work. It was a very smooth relocation, smoother than expected, and as a result,
we were able to land on an upward swing on sales of JPY1.4 billion, EBITDA of JPY1 billion, and operating
income of about JPY940 million, all of which exceeded the plan.
To break it down a bit, first of all, in terms of the Oisix ra daichi Group, the large-scale promotion that we
implemented from the end of last fiscal year, especially for the Oisix business, turned out to be a one-time
event. We ran that promotion until H1 of the year and acquired users, but we ended up spending a lot ofmoney on acquiring people who almost disappeared after about six months.
In H2 of the year, we stopped acquiring such members, so the speed of the decline has slowed down. However,as a result, the number of [inaudible] members has decreased from the beginning of the period, and total
sales remained almost unchanged.

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As for profit, we revised shipping and other costs and implemented various measures to improve profitability,
and we also recorded relocation and other costs. Together with that, the profit increased by more than 1.5
times compared to the same period of the previous year.
SHiDAX was consolidated in Q4. In terms of the performance of SHiDAX in Q4, sales increased by 4% comparedto the same period of the previous year. In terms of profit breakdown, the food service business wasconsiderably affected by the rise in raw material prices, but there was an increase in profit in other businesses,
resulting in a total increase of 9%.
This is recorded in the current financial year by consolidating the 12 months of the former Oisix ra daichi andthe three months of Q4 of SHiDAX. In terms of profit, in addition to goodwill, costs related to the shareacquisition of JPY0.38 billion were incurred in Q4. For operating profit, there was a negative impact of minus
JPY0.13 billion in this quarter; for EBITDA, a positive impact of JPY0.48 billion. This is the overview of theresults for the last financial year.

The rest of the document will not be explained in detail, as it contains what I have just explained.
EBITDA is also as explained to you.

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In terms of the former Oisix ra daichi, we have accumulated about JPY3 billion in various profit improvements
since last year. On the other hand, as I mentioned earlier, we have spent some promotion costs by H1 of theyear. In total, sales increased by about JPY2 billion in Oisix ra daichi, and together with the impact of SHiDAX,
overall EBITDA increased by 47% over the previous year.

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6Performance by segment. From this report, we use a new segmentation. I will explain the overall businessportfolio later, and the new segments are as follows: the B2C food business, the B2B food business, and thesocial services and vehicle operation services.
The B2B subscription business, which was originally part of the service by Oisix for nursery schools, has now
been added to the meal service business, which is the main business of SHiDAX. The social service and vehicle
operation service businesses are completely new businesses. These are businesses newly added by SHiDAX.

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In terms of subscriber numbers, as I mentioned earlier, the number of Oisix subscribers has decreased sincelast year. We found that the 390,000 subscribers last year included a large number of temporary users.
However, we continued to promote to these temporary customers. After such customers ran their course,
the number of subscribers settled down to just under 370,000.

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In terms of ARPU, it was this time last year that COVID-19 was reclassified as Category 5. Until then, ARPU had
been under the influence of the COVID-19 pandemic for about three years, but that settled down. Compared
to before COVID-19 in 2019, the numbers were growing, but the growth has calmed down.
However, looking at the breakdown, at Oisix, spend per order has increased, and while ARPU has remained
almost the same, revenue is higher than before.

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9The effect on operating profit from the consolidation of SHiDAX is as I mentioned earlier.

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10This is another report on SHiDAX's businesses that we disclosed before, for reference purposes.

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Then I will report on sustainability.
For Oisix ra daichi, the switchover to 100% renewable energy has been completed for all electricity needs.
From now on, we will work to reduce emissions under a new structure that includes SHiDAX.
In terms of food loss, we have always had a very low level of food loss. We continue to work on reducing foodloss in the fields or households, and in the last year, we have reduced our food loss by about 500 tons.

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The other topic is about our response to the Noto earthquake. This earthquake happened right after the
consolidation of SHiDAX and Oisix ra daichi.
SHiDAX had been providing hospital meals in a place called Nanao, but due to a power outage, the hospitals
were not able to provide meals to in-patients. At that time, Radish Boya was able to deliver hospital meals in
Nanao continuously by utilizing its trucks and other equipment.
Tokushimaru is also working as a mobile supermarket to deliver a variety of supplies to those people, manyof whom have taken refuge outside of the evacuation centers.
This is our report on the results for FY2024.

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Next, I will talk about the growth strategy of the new Group. We have many businesses, so this is a summaryof them.
We have three major business areas.
The first is our largest mainstay business, the food subscription business, with B2C home delivery amounting
to approximately JPY90 billion, and B2B food service amounting to approximately JPY55 billion, making up thelargest part of the business, about 70% of the total
The next is the social business, consisting of two businesses that SHiDAX mainly operated in. The social
services business, which outsources to local authorities, and the vehicle operation services business, which
receives vehicle outsourcing, are the two businesses that together account for a total of JPY70 billion.
The solutions business is the source of growth that supports the earnings of these two businesses. We support
the doctors of other companies and also conduct media business using our own e-commerce system.
Including other businesses, we are an entity with a total value of approximately JPY240 billion.
I will look at each one in detail.

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The first is the food subscription business, which is our main business. Two businesses have a combined
turnover of just under JPY150 billion at present.
In the domestic B2C sector, even Oisix is still facing the challenge of very low awareness, as noted on the right.
About half of the people are somehow aware of Oisix, but not many know more about it. There is still a lot ofroom for people to get to know more about it. Since the target households with children still account foraround 5% of the total, we believe that we can make a solid increase in this area.
In terms of CAGR, the growth rate has been about 10% each year since before the earthquake, so even withorganic growth, we expect to be able to achieve about JPY70 billion in the future.
In addition, we will target JPY200 billion for B2C, including new services, M&A, and so on.
In the B2B area, the market itself has been expanding gradually, and the number of food service companies
outsourcing their food service operations has been gradually increasing. This is due to the labor shortage.
The CAGR has still been about 2% here so far, though I still think it could be JPY10 billion here as well.
Furthermore, I believe that there will be a reorganization of the industry in the future, with more new services,or large-scale M&As. With that in mind, we will target JPY100 billion.

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So, we are considering a target of JPY300 billion for the existing food B2C and B2B businesses. Towards thisend, in 2024 we will generate synergies in the B2B and B2C businesses. We will manage the B2B businessproperly, which is a new for us. I believe that learning [inaudible] is very important, and in the future, I hope
to double this level of target.

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Furthermore, in this food subscription business, there are two things to expand in the future.
One is the overseas B2C. Currently, we have a business area of about JPY9 billion with Purple Carrot in the US,
etc. and its performance is getting better and better. In the future, we hope to expand our B2C businessoverseas as the next growth source for this JPY300 billion target.
Furthermore, as for "food tech products," we believe that we can develop new products by having this kindof distribution, including domestic B2C and B2B, and overseas B2C. We are still preparing to sell plant-based
meat and upcycled products in Japan and the US, and we hope to expand this business beyond JPY300 billion.

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17This is followed by our second business area, the social business.
The first is a social business that is entrusted by the local government for us to operate. For example, we
operate about 2,000 after-school daycare facilities, and we are by far the No. 1 player in the operation ofthese facilities.
We also operate school lunch services. This is in the No. 2 group. We believe that the shortage of labor will bea serious problem for local governments in the future, and we will have a large role to play in this area.
Also, regarding vehicle outsourcing, we are currently doing about JPY25 billion. This is another example of theuse of executive vehicles or local transportation infrastructure, such as running community buses in areas
where local bus routes have been lost. We believe that the future of regional transportation infrastructure,including regional versions of ridesharing, is a major issue, and that our business has the potential to grow as
well.

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The last business area is the solutions business.
For example, we are supporting the EC operations of other companies, such as Dean & Deluca and ISETAN
DOOR, and we are working to ensure that their EC operations are profitable.
These are three business areas.

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I will then explain the growth strategies for each of the most important individual business areas, but I will
mainly focus on the food business area.
First of all, the concept of Oisix's growth in the B2C market is the "time-saving" premium. The conventional
concept of time-saving is more like cutting corners, but what we have done at Oisix is to offer valuable time,or rather, time-saving can provide richer value. We have grown our business by doing so.
When we look at the food service business, it is very similar. After all, food service provides meals, but beyond
that, there are different objectives. If it is a nursery school, food helps build the child's body. Or, in the caseof hospital food service, to restore the health of patients. With these objectives in mind, it is very importantand required to provide such value in addition to simply providing meals.
Regarding shortening the time of delivery, in the case of households, people are getting busier and busier, but
in this field of food service, it is becoming increasingly difficult to recruit more and more people. In both cases,
we believe that we can provide more value with fewer people and in less time by utilizing our strengths, suchas meal kits and delis. We are thinking of transferring the B2C value with the "time-saving" premium to theB2B market.

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The reason why this is possible is because of the unique characteristics of the subscription business.
First, it is very easy to forecast demand, making it easy to procure goods in bulk. As a result, they can easily
increase their procurement capacity and lower their costs.
Or, since we have our own manufacturing facilities for meal kits, etc., we can use them as they are, both B2C
and B2B, thereby increasing both utilization rates and lowering costs.
Or, it is possible to make good use of brands such as Oisix. And also, as Oisix was originally started on theinternet, processes can be DX'd.
Therefore, we will leverage these strengths to realize premium “time-saving” in the two business areas I
mentioned earlier.

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There are already some synergies emerging between SHiDAX and Oisix. For example, we have alreadyintroduced the business to 19 nursery schools, where we could not get them as customers before, bydeveloping the business with meal kits.
Or, in the case of elderly care facilities, when we started a project with Benesse to provide an Oisix salad bar
at a new facility called Granda Kunitachi, in no time at all the facility had enough prospective residents whowanted to move in.
We are already seeing signs of synergies, such as an increase in the operation rate of food service when weoffered something like the Dean & Deluca collaboration in the employee cafeteria.
Furthermore, in addition to school lunches, as for the after-school daycare facilities, the customers, or rather
their parents, inevitably have to prepare lunches during the summer and winter holidays. We have started
experimenting with food services for those facilities.
Also, at the Oisix Niigata Albirex baseball team, we have a SHiDAX kitchen car, which has been very wellreceived. I believe that we are already starting to see the synergistic effects between SHiDAX and Oisix.

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I have a number of business ideas in response to that, but one thing I'm going to start right away is a foodservice facility business. One thing we are planning is to start using Oisix foodstuffs without raising the cost atmeal facilities for the elderly, company cafeterias, and nursery schools, especially in the Kanto area, during
the current fiscal year.
Secondly, we would like to start providing 100,000 lunches for after-school daycare facilities starting thissummer holiday.

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Including such synergies, what’s the role of B2C and B2B? As for B2C, I think the three things mentioned above
are the main things.
We are going to make the time-saving premium even more premium and ultra-short, and then we are going
to improve the promotions that didn't work last year, and then, as we newly announced today, we are going
to offer specific course services. These are the three things.

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First, we used to offer meal kits, but we have seen an increase in the number of customers who do not haveenough time for meal kits, so we have started Deli Oisix.
As a first initial response, we're seeing a lot of enthusiasm from our customers. We will start offering meals
that are ready-made and just eaten at home. In addition, we will develop a premium ultra-short time concept
by making time-saving lunch boxes and meal kits as well.

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In terms of promotion, we will take advantage of the mistakes we made last year to effectively promote our
products, as they are still not well known.
I will explain new meal services for specific needs. Our subscription business is based on a function of thenumber of subscribers and the annual sales per subscriber, and the annual sales per subscriber is around
JPY200,000.
That would mean JPY10 billion with 50,000 subscribers. There are services like Kit Oisix and meal kits that can
get about 300,000 subscribers on their own, while there are also services for specific needs that can get
between 30,000 and 50,000 subscribers. As a first step, we would like to launch a service that supports cancer
patients' diet, which has taken several years to prepare.
I think JPY10 billion with 50,000 subscribers is a target figure. We hope to develop services to help cancer
patients adjust their diets while undergoing standard treatment.

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In B2B, there are three issues.

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One is the labor shortage, which is becoming more and more apparent. We will continue to improve thetreatment of workers, which we have not been able to do up to now, and to adjust the number of workers inorder to cope with the labor shortage.
Next, price revisions. It is not an easy business to operate, but it is not sustainable to operate at a loss, so wewill offer our products and services at an appropriate price.
Third, as I have already mentioned some examples earlier, we will be doing collaboration for continuous
growth.
Through these three measures, we will establish a structure that will allow us to grow while continuing to
generate profits [inaudible] during this fiscal year.

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In the growth strategy, lastly, I will explain the social business.
First, with regard to the municipal outsourcing business, we are currently No. 1 with regard to the after-school
daycare facilities, and we have already received a fairly large contract, and we plan to achieve a growth ofabout 20% by ensuring that we are well-staffed and able to meet the needs.
School meals are also being outsourced at a slightly higher rate, so we have to make sure that we are well
staffed there as well to achieve growth.
In addition, we hope to expand comprehensive contracts with municipalities, as we have a wide range ofcontracts, such as with libraries and roadside stations.
In vehicle outsourcing services, we are No. 1 for executive vehicles, etc., and the outsourcing rate is increasing
due to the labor shortage, so we will be a firm recipient of these services.
In addition, when it comes to the regional areas, there are issues such as more serious labor shortages andthe withdrawal of bus routes. We would like to become a recipient of these issues to achieve growth.
It took a little longer, but the above is a description of each business area and their respective growthstrategies.

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29This is the target set for this period, which has already started in FY2025.
The forecast is for sales of JPY255 billion, EBITDA of JPY11 billion, and operating profit of JPY7 billion. As fornet income, there were a few special items about this quarter, as I mentioned earlier. Other than that, we will
manage the business well, generating the effects of the consolidation.

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30This shows the consolidation effects and an explanation of them.

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The breakdown by segment is shown above.

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In terms of the number of B2C subscribers for each of our brands, we are not planning to spend a lot of money
on promotions, but based on last year's experience, FY2025 will become a year of gradual growth for all ofour brands.

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Finally, I will explain our cash allocation and share buybacks.
As I mentioned, our EBITDA for the year is approximately JPY11 billion. Of that amount, after taking into
account taxes and borrowings, about JPY3 billion to JPY4 billion would be available for investment in growth.
In terms of profits from our growth investments, we first built two large manufacturing facilities of our own,
one in Ebina and the other in Atsugi. The investment in refrigeration and freezing facilities was around JPY4
billion to JPY5 billion in scale, respectively. Two of these facilities were built in the past two to three years,
and once this Atsugi facility is fully operational in Q1, our large-scale capital investment will be completed.
We have also made a large investment in the consolidation with SHiDAX. In terms of where we will allocate
the investment for future growth, we will make sure to generate synergies with SHiDAX.
Then, in the B2C area, we will promote and expand our B2C business and develop new services, such as
products with a premium ultra-time-saving concept that I mentioned earlier. We believe that this area would
be an area for growth investment.
Also, considering future M&A, we decided that it would be a good idea to acquire treasury stocks, taking into
account the current stock price situation.

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We are considering a 5% repurchase of our own shares up to a maximum of JPY3 billion.
That concludes my explanation. Thank you very much for your attention.
Umemura: Thank you very much, President Takashima.

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Question & Answer

Umemura [M]: We will now move on to the question-and-answer session.
When asking a question, please state your company name and your name at the beginning of your question,and limit each person to two questions.
Please note that we may not be able to answer all of your questions if you ask more questions than we cananswer.
We will now move on to accepting oral questions first. Now, Mr. Sumi, I will unmute you, and thank you foryour comments.
Sumi [Q]: Thank you. I am Sumi from Tokai Tokyo. I would also like to ask two questions. First, regarding yourexplanation of B2B, I believe you mentioned on your slide that M&A is also an option. Could you first tell us
about the current B2B, President Takashima's view of the industry environment and M&A, as well as yourthoughts on the future outlook? That is my first question.
The second point is the idea of synergies. Although you have given us a very good top-line forecast, looking at
the plan for this fiscal year, I think that the consolidated effect of SHiDAX is still significant. In terms of thesynergies and the timing of profit generation, when do you think will these synergies start to materialize?
Please tell us about this area. I would like to ask these two questions.
Takashima [A]: Thank you very much, Mr. Sumi. First of all, the B2B outlook is different depending on the typeof business, such as company cafeterias, hospital meals, meals for the elderly, nursery schools, and so on.
Perhaps the company cafeteria itself will decrease a little in some areas. I think the market is neutral, with inhouse operations decreasing and outsourcing to other companies increasing.
On the other hand, I believe that the market for food service itself will continue to rise, especially for elderly
care facilities. Now, the market itself is growing, albeit with a difference. Due to the shortage of labor, there
are some cases where food service providers are also unable to arrange for manpower.
Last year, it made headlines when a company called Hoyu suddenly became unable to continue its food service
operations, and I think something similar is happening all over the place. There are business opportunities out
there, but there are not that many vendors who are willing to raise their hand, and this is happening all overthe place. There are particularly tough business areas, such as in hospital catering.
In that sense, I think it is very important to create an environment where a small number of people can work
together on the site. We are in a situation where there are a number of projects that are not open tocompetition, so the first step is to respond to this manpower saving.
To achieve this, it is also necessary to improve the treatment of workers and reduce the turnover rate fromthe current level. I also think it is important to develop meal kits, delis, and fully prepared meals that allow asmall team to achieve a high level of customer satisfaction.
Therefore, I believe that in the B2B business, there will probably be some companies that will no longer beable to provide such services on their own. So, it is highly likely that there will be a reorganization of theindustry, not just of our company. In this context, we hope to realize our goal of being on the side ofrestructuring by firmly creating the premium value of labor saving, as mentioned earlier.
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In terms of synergies, there are some that appear in the short term and others that take a little longer in themedium to long term. In the short term, we will improve the treatment first, and will be doing things that wehaven't done before, things that we haven't done very well, so that will increase our costs in the short term.
On the other hand, for those areas that have continued to operate at a loss, we will negotiate resolutely, andif withdrawal is unavoidable, we will do so, which will lead to a recovery in earnings. We expect this area tobreak even in 2024.
Other than that, I think we will be able to create a situation from next year onwards where meal kits and thelike will contribute to our performance, not only improving our earnings, but also enabling us to increase
projects. We need to deepen our understanding in this area and provide more concrete figures. This is theway we see it now. That is all.
Sumi [M]: I understand very well. Thank you. That is all.
Umemura [M]: Thank you, Mr. Sumi. If you have any questions, please press the raise-your-hand button.
Any other questions? Then, since there are no questions by text, I have now received all of your questions.
This concludes today's briefing.
Thank you very much for taking time out of your busy schedules to join us today. Thank you very much.
Takashima [M]: Thank you.
[END]______________
Document Notes
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