Oisix ra daichi Inc.
Financial Results Briefing for the Fiscal Year Ending March 2021
May 13, 2021

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 Ending March 2021

[Fiscal Period]

FY2020 Annual[Date]

May 13, 2021

[Number of Pages]

61[Time]

16:00 – 17:07(Total: 67 minutes, Presentation: 34 minutes, Q&A: 33 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

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Kohei Takashima

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Presentation
Sato: Thank you for your patience. The time has now come, so we will begin. Thank you very much for taking
time out of your busy schedule to join us today for the financial results briefing for the fiscal year ending
March 31, 2009 of Oisix ra daichi Corporation. My name is Sato, and I will be your host today. I am looking
forward to working with you.
Today’s financial results briefing will be divided into 2 major parts. In H1 of the presentation, ourrepresentative, Mr. Takashima, will give a 30-minute report on the financial results. In the latter half of thesession, we will move on to the Q&A session with the participants.
In the Q&A session, we will use ZOOM’s raise hand function to ask questions verbally. For those participants
who are unable to speak due to the environment they are in while participating, we will also accept questions
via chat. The details of the Q&A session will be explained later. I would now like to move on to the financial
report.
Mr. Takashima, please take the stage.
Takashima: Hello, everyone. Thank you for your patience, and for taking time out of your busy schedules tojoin us today.
On April 7 of last year, the first emergency declaration was issued, and on April 9, we were reassigned to theFirst Section. Since then, we have not had the opportunity to meet with investors directly, and more than ayear has passed. Today, too, we are gathering online.
I cannot quite tell what the atmosphere is like, which is unfortunate, but I hope that someday I will be able
to meet everyone again, and feel the atmosphere as well.
First, I would like to talk about our business performance, followed by our growth strategy, sustainability, andfinally our key plan.
It is difficult to distinguish between the results of a very special year and the execution of our business strategy,
but I would like to explain them as separately as possible, so I would like to spend more time than usual on
the business results and the next fiscal year.

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I would now like to start with a summary of our business performance.
There is another peculiarity, apart from the peculiarity due to the coronavirus, which is Purple Carrot, which
is located in Boston, US, acquired by us in 2019, but last year it was half. Only Q3 and Q4 were covered by ourconsolidated financial results, but as the 12-month period up to the fiscal year’s end in March 31, 2021 will
be covered, I would like to mention that there will be a change there.

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First of all, I would like to give you a summary of our business performance for the last 3 months and Q4. In
Q4, we had almost achieved our profit target, so it was important for us to invest firmly in promotions andother activities to acquire members.
In response to this, we made progress in acquiring members as planned, and although we did not anticipate
it, due to the declaration of an emergency situation, ARPU continued to stay higher than we had expected
and was about 10% higher than the previous year, so we were able to capture that portion of the profit margin.

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4And looking back over the past year, our sales for the year were JPY100 billion, more precisely JPY100 billion
6 thousand, so we are really on the edge. Originally, we were operating under a medium-term management
plan that aimed to achieve JPY100 billion this fiscal year, but we were able to achieve JPY100 billion a year
ahead of schedule.
Of course, it was a special year, and I do not know if I should call it a special demand, but there were somespecial needs. As a result, we were able to achieve a significant increase in profits to JPY8.9 billion.

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Looking at the breakdown of sales, around this time last year, the Oisix distribution center broke down andwe were unable to promote for a while. From Q2 onward, we have been able to increase the number ofmembers to a total of 80,000.
As for ARPU, it was about 20% higher in Q1, around this time last year. The ARPU for the full year is still 15%
higher than the normal level, and this has contributed greatly to the temporary increase in the profit margin.
In the US, as I mentioned earlier, the consolidation of 6 months’ worth of data was changed to 1 year’s worth,and also in the US, due to the impact of the coronavirus, the [inaudible] companies have grown significantly.
Specifically, we have doubled our sales, and we have achieved profitability, which also contributes to the total
consolidated results.
In terms of each number, it is as follows. In February, we made another upward revision, but all the numbers
exceeded the upward revision made in February. In particular, the profit side of the business has been greatly
exceeded, which means that the budget at the beginning of the fiscal year has naturally been achieved andsurpassed.

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It is very difficult to distinguish between the part that is caused by the new coronavirus and the part that is
not, but for the sake of convenience, I think the most near-equal part is the subscribed business, so thenumber of members will suddenly decrease. Since it is unlikely that everyone would quit, I thought that the
number of members would not decrease drastically after the end of the coronavirus.
On the other hand, regarding ARPU, there was still a more special condition than usual, so we assume that it
will return to the normal level.
If you look at it that way, for the past year, the year that ended, I am reading it as a value of competence, but
sales were about JPY90 billion. I think that EBITDA will be about JPY5.4 billion, about 1.5 times the previous
year’s level.

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7So, as I have often mentioned in my explanations today, the actual results and the potential results, I believethat the potential results are an increase of JPY20 billion and the actual results are an increase of JPY30 billion.
In terms of profit, our ability is 1.5 times, or JPY5.4 billion, but the actual result is JPY8.9 billion, which is about
2.5 times.

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To explain in more detail what I just said about profitability, overall sales have increased by about JPY30 billion,
but the home delivery business has grown by about JPY20 billion, half of which is due to the impact of ARPU
and the other half is due to the increase in the number of members.
In addition, various other businesses have grown, such as supporting other companies’ e-commerce. Hong
Kong has also grown, and Purple Carrot has also grown, resulting in a total sales growth of about JPY30 billion.

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9Similarly, profit-wise, ARPU’s effect is enormous. If the unit price per box increases, it doesn’t matter how
much cardboard is transported, the cost will be the same regardless of the amount of logistics and material
costs, so the impact on profits was quite large.
The value according to ability is about JPY5 billion, but the actual value achieved is JPY8.9 billion.

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If I break it down by segment, Oisix sales are almost JPY50 billion, which is a 1.4 time increase.
Both Daichi wo Mamoru Kai and Radishbo-ya said that their sales would gradually decrease until last year.
It wasn’t until the year before last that Daichi wo Mamoru Kai was finally at about the same level as before,
but in the last year, all of our businesses have grown.

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In terms of the number of people, the number has increased by about 80,000, and the total number ofhouseholds purchasing subscriptions in Japan is almost 420,000. This is how it works.

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12This concludes the overview of business achievements, and now I would like to talk a little about the detailsof each business.
I would like to talk about the 3 major brands in Japan, other brands, and other businesses in that order.

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First of all, Oisix was the one that grew the most in the end. In terms of the number of people, the number
has increased about 1.3 times, and ARPU continues to remain high.
As usual, we have seen a significant increase in the number of kit customers.

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Also, concerning promotion, we could not do any promotion in Q1.
As the capacity of the center became full, we launched a new service called Crispy! Oisix, which is a bit of adesperate measure, but it has fewer SKUs and is easier for customers to purchase. We have been able tocapture the needs of our customers through this approach, and we have been able to acquire new customers
based on this.
Since the beginning of this year, we have been experimenting with TV commercials only in the Kansai andTokai regions, and have been able to confirm that we can acquire customers at the expected cost.

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Also, Kit Oisix is trying to add value in various ways.
In particular, in the past year, we have focused on the value of dietary education, and collaborated with Disney,
Benesse, Kodomo Challenge, and other organizations to help families spend a lot of time at home together.
As a result, their picky eating habits may disappear. That is what we are trying to do. Very well received.

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Purple Carrot is also expanding its business in Japan, and the number of people who are concerned about
their health and the environment is increasing, and Purple Carrot’s meal kits are growing steadily in Japan.
I also started a home restaurant that was originally intended to support restaurants that were banned fromoperating. We started Oisix, but it has been very well received since then, so we are continuing to develop it.

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Next will be the Daichi wo Mamoru Kai.
There was a time when Daichi wo Mamoru Kai was losing customers little by little, but in the year before last,
we were able to improve our services a lot, so we were able to stop losing customers at about the same level.
In FY2020, we finally decided to increase the number of members, but with Oisix shutting down, the number
of Daichi wo Mamoru Kai members suddenly increased. Especially Q1, which had significant increases.

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ARPU is also quite high, and although ARPU was originally the highest of the brands, it has grown even more.
In the case of Daichi wo Mamoru Kai, the main customers are senior citizens who live alone, so we offeredvarious services for 2 people and products for people who are concerned about their health.

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Next is Radishbo-ya.
Radishbo-ya is also reducing the number of staff, and they need to improve their operations. That was animportant theme for me last year. After all, there was a high need for temporary home delivery, and we wereable to increase the number of members, as well.

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There were, on the back end, operational issues that led to higher rates of complaints than other brands.
However, we have been able to stabilize the quality of our operations over the past year by implementing
various measures, and we are now ready to start building new services. Currently, we are in that phase.

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As for other domestic businesses, we are now allowed to provide figures.
Our collaboration with ISETAN DOOR is going very well, and we are almost at the 40,000-person scale ofdelivery. The ARPU of Daichi wo Mamoru Kai is the highest, since it has about 45,000 to 46,000 customers,
but in 3 years, the business has grown to the point where it is approaching that number, so it is doing very
well.
Then, the meal kit. This is also growing, although we have not yet been able to provide numbers for this one.

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Then there is the Tokushimaru.
This is a different type of business because it is aimed at people affected by supermarket shortages, butbasically it delivers food to senior customers in their 80s and 90s. Since we deliver by car, it is like a B2B2C
subscription, and the number of units has grown the most so far. In addition, as people in their 80s and 90s
are now staying at home all the time, the amount of money distributed per unit has increased, and the total
amount of money distributed is JPY16.5 billion.
As for supermarkets, we have increased the number of supermarkets related to Ito-Yokado through ourpartnership with them, and we now have 143 companies.

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Out of other businesses, the first is Purple Carrot in the US.
For the first time, the Company was profitable, and sales more than doubled. We improved operations greatly
since our arrival, and lowered the rate of complaints. In addition to this, in the US, we had more problems
with the coronavirus than in Japan, so I think that was a big windfall in the delivery business as well.
Also, we used to sell only meal kits, but now we have started selling frozen food at Whole Foods Market.
From next year onwards, we are planning to sell our products in other stores, and although this is a web-based
service, we are also developing ways to display the Purple Carrot brand in real stores.

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In Asia, Hong Kong has also seen considerable growth.
Hong Kong also temporarily had a problem with the coronavirus earlier than Japan, so it grew at that time.
On the other hand, it was difficult for us in Shanghai.
We had positioned this as the first year to build the Shanghai service, but in the end, our employees were notable to go there, so we are preparing for the launch of the service as much as we can in a remote environment,
which means the launch of the service is a little behind schedule. It looks like I’ll be able to get a visa soon, so
I’d like to actually go there and start building the service.

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The ER business had its ups and downs, with supermarkets doing well, but being affected by department store
closures.
However, I was thinking that meal kits are gaining a lot of something like citizenship. At the model stores, daily
sales have increased by about 2.5 times, and I believe that this is becoming an item that is very easy forsupermarkets to sell, so we would like to increase the number of stores at once later this year.

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26And the nursery schools were the most negatively affected for us.
The nursery school may be closed, or the number of children per school may be reduced even if they do attend.
Also, it was hard to do business.
Because of this, there was a headwind, but we are now opening new stores in Kansai and other regions.

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Since this is a societal topic, I will briefly report on social activities.
This time, around this time last year, we launched a platform called WeSupport, and we have 120 foodcompanies participating in it. We are in charge of the secretariat, and it is difficult for medical staff to getenough food in their daily lives.
I heard that there was a problem that medical personnel could not get satisfactory meals, so I asked what we
could do about it. With the cooperation of 120 companies, we have been able to provide a total of JPY700
million worth of meal support to 106 hospitals and medical institutions.
At present, some hospitals are saying that they are fine because they can now afford it, while others are very
tense and cannot eat enough meals, so we would like to continue this scheme for a while. We would like tocontinue this scheme for a while.

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Also, we can no longer go to the farmers or ask them to gather together, but rather we can exchange
information online. There were many organizations that participated, and we were able to exchange
information about their agricultural technologies online.

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29Apart from that, we received a few awards.
These are my reflections on the past year.
I have spent 20 minutes just looking back on the past year, so I would like to quickly talk about the future.

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We have been working on the food subscription business since the beginning, when we started with just Oisix,
but we have also been working on business integration and other things like that. In addition, there are othercompanies not shown here, such as Isetan, that are developing their business in the form of subscriptions,offering different values to different customers through multiple brands.
However, I think it is quite rare for a food subscription company to have multiple subscriptions of this scale,even in the world.

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By doing this, I feel that we have been able to create a growth model for our food subscriptions.
It is very simple. There are customers and producers, and we run multiple brands on our specialized platform.
When we provide a good customer experience through our subscriptions, we can increase the number ofcustomers and grow the business. We can grow our business, but since we are a subscription, we are able topredict demand very easily, and stably tell various producers when and how much demand there will be.
This means that we can communicate directly with the suppliers without having to go through the market
function in between, and as a result, we can secure good quality suppliers, and since we know the quantity,
we can create highly original products. Since we share a platform for multiple brands, we are able tocontinuously lower our operating costs, and what we learn from one brand can be immediately shared withother brands as marketing know-how, which will increase our profitability.
This is very simple, but I believe that our growth strategy is to grow by moving things around between
producers, consumers, and ourselves.

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I would like to briefly explain the specifics in 3 areas.
For Oisix, the main target is mothers and fathers of small children, so while providing value, this year we willoffer a lower price range that is easier to buy, extend the shelf life, and promote the use of plastic-freematerials. In addition, we will try to eliminate the pain points that make it difficult to continue.

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As for Daichi wo Mamoru Kai, we are planning to launch several new services for seniors who live alone, tomake it easier for them to feel healthy.
On the other hand, Radishbo-ya has many people who love to cook and have a strong sense of social
contribution, so we are developing a service called Fuzoroi Radish in which customers can cook sub-standard
or over-processed food, and the better they cook it, the better it is for the earth. The more you cook, thebetter it is for the earth.

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Also, as I mentioned earlier, Tokushimaru is in its 80’s and 90’s, and we would like to create a private brandthat specializes in these people.
Purple Carrot is vegan and plant-based, which is becoming quite common in the US, so we are thinking in thearea of customer experience to increase the number of ready-to-eat products, not just meal kits.

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Next, in terms of products, I would like to continue to increase the originality of our products. At present, thePB ratio is not 100%, but it is 80% or 70% for each brand, and we will continue to increase the number of
products that we can offer because we directly connect producers and consumers.

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Last, but not least, operations.
In terms of profitability, we believe that our EBITDA margin is currently around 6%. In terms of actual results,
it is much higher, but in terms of ability, it is about 6%, and I feel that my ability is about 1% better than lastyear, but I think I can achieve 10%. I think we can achieve a 10% profit margin, and, of course, there is theimpact of various environmental changes from time to time, such as with the coronavirus, but other than that,
I think we can achieve 10% EBITDA.

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Specifically, of course we need to increase the unit price per customer, but in terms of profitability, I think
there are 2 major opportunities in terms of cost of goods sold and logistics costs.
As for the cost of goods, we can reduce the cost of goods by increasing the rate of in-house production ofprocessed meat products, or processing, such as cutting and packaging, and also by increasing the productivityof kits, since the volume has increased considerably. I think we will be able to reduce costs by improving
production efficiency.

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In addition, in February of this year, we acquired a portion of the shares of AP Company and made it aconsolidated subsidiary of our company, which is now called Toyosu Fishermen’s Market. The market is now
called the Toyosu Fishermen’s Market. These are the product aspects.

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In terms of logistics, the new Shin-Ebina station is scheduled to be completed in October this year.
We will have about double the capacity of what we have now, and since it is double, it won’t last very long,so we have to think about what comes after that. For example, I believe that once the number of employees’
doubles, the operation will be much better.
This year, the number of Oisix centers has been increasing, and we are planning to integrate all of them into
a new station in Ebina from October this year over H2 of the year, so that we can achieve a high profit margin
from the next fiscal year onward.

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40And one more thing, I would like to talk about sustainability today.
As I mentioned earlier, the food subscription model is good in terms of increasing profitability and growth,
but it is also very good in terms of sustainability. In particular, eliminating food loss can have a positive impact
on the entire supply chain.

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Upstream, in the fields, and midstream, in the distribution industry, including logistics, is us. And downstream,
I mean the customer’s table.
Specifically, in the upstream, the fields and we are linked by information, so we can use what is discarded in
the fields instead of throwing it away.
We, in the midstream, are able to adjust supply and demand based on data, so we are able to reduce foodloss to a much greater extent than general distributors.
Downstream, for example, meal kits can be used to eliminate food waste that must be disposed of at home,
and we hope to eradicate food loss in all supply chains, upstream, midstream, and downstream.

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Specifically, in the upstream area, as I mentioned earlier, raw materials that would normally be thrown away
if there was a good harvest can be used for kits and frozen products. Or maybe fuzoroi, that is, discounted
malformed vegetables.
And I have a section called Upcycle by Oisix that I plan to start in July this year, and here, for example, I was
thinking of using broccoli stems as chips. By adding value to things that are inedible as they are, we willcontinue to promote the idea of eating up thoroughly.

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Also, in Kawanaka, as for the distribution industry, while the disposal rate in general supermarkets is 5% to10%, ours is currently 0.2%. And we think we can reduce this even more, though.
The reason why the number is so low is that we have data on customers’ preferences, what they like, as wellas the growing conditions of crops in 4,000 farms on both sides, and we use our own algorithms to matchthese data every week. We know both sides.
By using this system, we will be able to sell out our products in a way that does not cause any loss and does
not lower the level of customer satisfaction. I would like to continue polishing this model.
Also, if you use the kit, you will not send food that you do not need, so the loss at home will be reduced byabout 1/3.

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We are also working on carbon neutrality and hope to achieve carbon neutrality as a business by March 2026.

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Finally, I would like to talk about the outlook for the current fiscal year.
We are targeting sales of JPY105 billion and EBITDA of JPY6.5 billion.

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As I mentioned at the beginning, there are actual results and potential results, and of the JPY100 billion in
actual results, if we assume that ARPU will decline this year, the potential value is JPY90 billion. As a result, I
think we will be able to achieve JPY105 billion, which is double-digit growth compared to the previous year
on a performance basis.

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When we achieve this, we believe that we will be able to achieve double-digit YoY growth in terms of profit,
or growth in terms of competency, but in the future we would like to increase the EBITDA ratio to 10%.

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49Our first financial results after the integration of the 3 companies were for the fiscal year ended March 31,
2019.
Since the merger of the 3 companies, which became Oisix-ra-Daichi, we have achieved a CAGR of 18.9%, orjust under 20% in terms of sales, and a profit growth rate of just under 30%.

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50And again, I think we will be able to double our current capacity when the construction is completed in
October this year.

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As for our customers, we would like to increase this by about 1.2 times, for a total of 470,000 members in ourbusiness.
I have rushed through this, but I believe this concludes my explanation. Thank you.
Sato: Thank you very much, President Takashima.

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Question & Answer

Sato: Now, let’s move on to the Q&A session.
The Q&A session will be conducted in the form of oral questions using the raise hand feature of Zoom. Please
limit the number of questions to 2 per person. When you ask a question, please tell us your name andcompany name at the beginning. For those who are unable to speak due to their participation environment,
we will accept text from the Q&A button on the screen. After the oral questions are completed, we will moveon to answering the questions in text.
We will now move on to accepting oral questions.
I have a text question for you, so I will start with that first.
The question is: What is the progress of the alliance with Yamato Transport and how will it develop andcontribute to your business performance? Thank you.
Takashima: Thank you. We have been talking with Yamato Transport on an ongoing basis, and since we havethe largest volume of cool TA-Q-BIN services, we have been negotiating prices on an ongoing basis, and wehave been able to reach an agreement that satisfies both parties.
Also, as I mentioned earlier, we can double our capacity when the new Ebina facility is built, but in otherwords, we can only double our capacity, so we are discussing with Yamato about what to do after that. It isvery important to be able to integrate our operations with Yamato’s operations afterwards, so we are
discussing the possibility of sharing bases together in some cases.
We are also working with Yamato to develop a way to ensure delivery without having to redeliver items thatare refrigerated or contain food, because it is not good for Yamato or the customer, and in the past year it
has become common for customers to request deliveries to be left at their door. We are working with Yamato
to develop a way to ensure that the food is delivered without having to do this.
In terms of contribution to business performance, the Company is providing support to ensure that businessgrowth is achieved smoothly. Thank you.
Sato: I have received a raised hand question, so I will call your name.
Kaku: My name is Kaku from Tokai Tokyo Research Center. Excuse me, I have 2 questions.
Regarding the assumption of ARPU in your plan for this fiscal year, you said that ARPU is expected to be thelevel before the coronavirus, but looking at Q4, I believe that ARPU is still on an upward trend. First of all,could you tell us about the current purchasing trends of customers in Q4 and how these trends are currently
moving? This is the first point.
The second point I would like to make is to reconfirm our policy on shareholder returns. Currently there are
no returns, and the third period of 24 shows a planned EBITDA margin of 10%. Once you achieve this goal andgenerate high and stable earnings, will there be any changes in your shareholder return policy? Will there be
any changes in the policy of shareholder return? Please help me with the above 2 points.

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Takashima: Thank you. First of all, regarding ARPU, as you pointed out, in the formulation of this businessplan, we calculated JPY105 billion based on the assumption that we would return to a flat ARPU from April
before the coronavirus, and EBITDA of JPY6.5 billion.
However, as you may have noticed in your daily life, although the state of emergency has been extended,
there is not a sense of great tension. As a result, the ARPU is probably less than 10%, and looking at Q1, April
and May, I feel that the ARPU is nearing 10%, so I don’t know what will happen for the full year.
Last year, when GO TO EAT and GO TO TRAVEL temporarily gained momentum, our ARPU was like a rebound,
so I don’t know what will happen, but in this latest Q1, the situation is like that, about 10% on average.
As for shareholder returns, as you pointed out, we would like to think about returning profits to shareholders
once the situation becomes stable. It would be strange to say that reaching JPY100 billion is the goal, but there
are many mail-order companies that reach the JPY100 billion ceiling. I believe that we are at a very importantcrossroads to determine whether we will end up as a medium-sized company or a growing company.
As we obviously wish to be a growing company, we want to grow at a rapid pace, faster than what we are
currently offering, so at this time, we would like to prioritize investment in our company and grow ourbusiness, but would also like to consider paying dividends at a stable time in the future. Thank you.
Kaku: Thank you very much. That is all.
Sato: Thank you very much, Mr. Kaku. If you have any questions, please raise your hand. So, Mr. Saito, I will
apply for unmute, so please ask questions.
Saito: Hello, this is Saito from Snow Lake Capital, can you hear me?
Sato: Yes, I hear you.
Saito: I would like to ask about 2 points as well.
Sorry, I also have a question about ARPU, but I understand that it was basically assumed before thecoronavirus, but even when the state of emergency was lifted, I read in this morning’s Nikkei thattelecommuting was actually being done by more than 18%. When I talk to various companies, I hear that after
the coronavirus, people also continue to work from home to a certain extent. Considering this, I personallythink that the ARPU of the Oisix brand, especially for households with children, can be maintained at a higher
level than that of pre- coronavirus, but I would like to hear your thoughts.
The second point is about TV commercials. I understand that there was a certain amount of TV commercials
in Q4, but after that, how much recognition does the Oisix brand have in Japan? I understand from your earlier
comment that the TV commercials were reasonably successful, but could you also comment on how much TVcommercials were actually used in the fiscal year ended March 2009, and how much investment will be madein the fiscal year ending March 2022? These are my 2 questions.
Takashima: Thank you. As for ARPU, as you pointed out, we are not extremely bearish, and we have clearlygrasped the needs for breakfast and lunch, so we think that we will not go back to zero and are developing
such products. On the other hand, as the number of customers increases, ARPU tends to be a little lower for
new customers.
The ARPU of the existing customers is higher than that of the new customers, and the number of lightcustomers will increase. To be honest, I don’t think that the ARPU of our current customers will return entirely

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to the original level, but if the number of customers increases, the average ARPU may return to the originallevel.
Also, the level of awareness varies greatly depending on how the data is collected, but the number of people
who have heard of Oisix is very high. I would say about 80% of them are mothers. Our current target is toincrease awareness and understanding of the Company, as we realize there is relatively little awareness ofwhat the Company is or does.
In that sense, the TV commercial was not bad, done in Kansai and Tokai. It was not bad relative to our plans,
but it was still a bit expensive compared to the effect of online advertising, which is our mainstay right now.
It is still relatively expensive by comparison. I think we have achieved our goal, but I am not sure how much
more we can spend if the effect is better. In the Tokai and Kansai regions, we are experimenting with different
creative patterns and trying to find the most effective one, so I think it depends on that. What was it again?
Saito: If you could comment on how much TV commercials you actually used in the fiscal year ended March
2021, and how much you expect to use this fiscal year, please do so.
Takashima: I do not really see it as just TV commercials. It is like how much you can spend on promotion in
total. I am sorry, I haven’t decided exactly what I want to do, but I would like to do as much as I can as long as
the acquisition cost per person stays within this target, or something like that.
Saito: Sorry, I have to add, lastly, with regard to the CAC, I believe the customer acquisition cost used to bearound JPY15,000, but has this level remained unchanged, or do you feel that you are in the phase of raising
the CAC a little more to acquire customers while increasing awareness through TV commercials?
Takashima: In terms of the current situation, we have not changed it. Last year, we were able to get the orders
without spending a lot of money on acquisition costs, and that raised our profits quite a bit, but now the priceis a little lower than JPY15,000, but we haven’t set it higher. TV commercials were originally priced at
JPY60,000 or JPY70,000, but now they are getting closer to JPY15,000, though not quite there. Therefore, weare currently working with the basic idea of recovering the acquisition cost in 6 months.
Saito: Thank you very much.
Sato: Thank you very much, Mr. Saito. Is there anyone else who would like to ask a question orally? Then we
will move on to answering the questions you have in the text.
First question is: How do you think the coronavirus will change Japanese lifestyles and values in the long run,and how do you think it will affect your business? Please respond to this question.
Takashima: I think it would be better to answer the first and second questions together, if that is okay.
Sato: I will now read out the second one as well. Your second question is whether the effects of thecoronavirus will disappear with the spread of vaccines, etc., and the behavior and values of consumers will
return to pre- coronavirus levels, or whether we are making irreversible changes.
Takashima: Thank you. In the end, I think it is a question of what will return and what will not return. For
example, I believe that ordering food through e-commerce is highly irreversible, not only for us, but also for
Uber and Delivery Service. As a result, I think that 2020 will be the first year of food e-commerce, so I thinkthat the temporary very high ARPU of last year will return to the norm, but I also think that the fact thatpeople buy food through e-commerce will not change.

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The fact that we do not work in an office every day that we work in various places is also highly irreversible inthe city, and that we work at home continuously, I believe that we will have more meals at home. As a result,
I believe that as the number of times customers cook at home increases, the need for simplicity in each dishwill continue to rise.
In addition, I believe that health awareness has been greatly enhanced by this event. I think that healthinvestment will also continue to be a way for Japanese people to build a healthy body so that they do not getsick, instead of just going to the hospital when they get sick.
To put it simply, I believe that e-commerce, quick-eating, and health-consciousness will continue, and wewould like to provide services that will benefit our customers in such a world.
On the other hand, what will not be left is the entertainment that is more fun to enjoy at home. We tried
advertising around the idea of enjoying yourself at home, making the best of the situation, so to speak, but I
think once the option exists again, people will prefer going out. The quality of entertainment will always behigher outside the house. That is all.
Sato: Now let me move on to the next question. You mentioned that you are going to increase the number of
products sold to real stores, but I asked if you have any specific numerical targets or measures that go beyond
just wholesale business such as meal kits.
Takashima: Is it enough to answer the first question? First, in terms of the number of stores, we would like toexpand from 500 to 1,000 stores, at least.
In addition to meal kit wholesalers, we are currently investing in a variety of innovative products through afund called the Future Food Fund. Some of them are domestic companies, some are international companies,
but we will start by selling the future food that we have found at these places on our own, at Oisix.com,
Radishbo-Ya, and Daichi wo Mamoru Kai. If the products are well received, we will sell them to supermarkets
and other external parties. In some cases, we are considering expanding into innovative product areas,
including manufacturing our own products.
Sato: Thank you very much. Continuing question. The scope of our business is expanding to include
partnerships with food service companies and food education, and we have a large number of brands. The
question is, in terms of conglomerate discounting, please tell me if there is a possibility of promoting selection
and concentration. Thank you.
Takashima: Thank you. My feeling is that the number of brands is expanding, but the number of businesscategories is decreasing, or rather, only the food subscription business is left.
In general, conglomerates have a variety of businesses, including home delivery, restaurants, andsupermarkets. In addition, we also have a hotel and an electric power company, which I think is a kind of
conglomerate.
In our case, since we are developing multiple brands in the home delivery field, there is no disadvantage, ordisadvantage that can be discounted. I think it is becoming easier and easier for us to focus on one type ofbusiness.
Of course, from another point of view, if the growth of the business becomes difficult, we may stop the brand,
but we are not thinking of integrating brands under the concern of being a conglomerate at the moment. On
the contrary, we would like to continue to develop new services given the wealth of opportunities, and wewill continue to consider whether we should use existing brands or create new brands.

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Sato: Thank you very much. I would like to move on to the next question. The question is whether it is safe toassume that linking the Toyosu Fishermen’s and Merchants’ Direct Market will lead to a more aggressive
introduction of seafood products, which will lead to an increase in ARPU. I am looking forward to working
with you.
Takashima: It has already been nicknamed Toyoshi by Toyosu Fishermen’s Association, not by Mr. Toyoshi,
because it is his company. We have started selling products from Yutaka City, and they are very popular. Oisix,
Daichi wo Mamoru Kai, and Radishbo-ya have all been very well received, so of course we believe that thiswill lead to an increase in ARPU.
Sato: Thank you very much. Let’s move on to the next question. Please tell us about your logistics strategy. I
heard that you are working with Yamato to promote redelivery and other services, but do you have any plans
for the consolidation of logistics bases?
Takashima: As for the logistics base, I mentioned earlier that a new Oisix will be opened in Ebina, but I think
we need to start thinking about the next base. The next step is to consolidate refrigeration bases. Right now,
we have refrigerated, frozen, and room temperature products, but frozen products are a different operation,
so I think the next step is to consolidate the freezing centers.
Then further down the line, in the case of Oisix, it is next to Ebina in some cases. In terms of BCP, I think weneed to think about Kansai and western Japan as well, but we have to think about that. Also, the operationsof Daichi and Radish are similar, so I think there is a possibility that we will consider consolidating them. I think
the first thing we need to do is to get the next Ebina plant on track smoothly, then consolidate the refrigeration
business, and then think about western Japan.
Sato: Thank you very much. Due to time constraints, this will be the last question I will answer. What is thetime frame for the penetration of veganism in Japan, and to what extent do you think it will spread? Thequestion is also, are there any companies that could be your competitors in this area of vegan food delivery?
Takashima: It is very difficult to predict the future in this area, but if you look at the US, the term vegan has
been changed to plant-based, but veganism is a lifestyle, and plant-based is a material description of products,
so it seems to be a little different. In the US, I believe that it is not a temporary fad, but something that has
become a part of daily life. There is a sense that veganism is only for a few people, but what is spreading in
the US is people who are not full-time vegans, like Purple Carrot.
They call it part-time veganism, but there is a growing number of mixed and flexible people who say, “I ate
too much steak yesterday, so I am going vegan today,” or “I am going plant-based.” Rather than justfollowing a transient movement, we would like to be an option for Japanese people who want to live aplant-based, vegan lifestyle today. We would like to be an option for Japanese people who want to live aplant-based, vegan life.
In that sense, we do not feel that we are competing with anyone else at the moment, and on the contrary,
we are not referring to anyone else in Japan, but rather, we are looking at American examples, arranging themin a Japanese way, and going our own way. Well, we are a company that doesn’t really recognize ourcompetition, but that is the situation.
Sato: Thank you very much. Is it possible to answer just one more question?
Takashima: It is possible, yes.
Sato: Thank you very much. One more question, and I am a little over time.

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Takashima: Okay, 2 questions, the one you gave me.
Sato: I will now answer the 2 questions that you have asked. In the US, I have heard that Walmart is making
a comeback, using its capital strength and store network to invest in digital and take back quite a bit of market
share. The question is, do you think that the existing store-based retail online ordering and delivery model inJapan cannot be a threat at the moment in terms of know-how?
Takashima: I really think Walmart is amazing. However, this does not mean that Japanese supermarkets are
not at that level, but rather that our services and the services provided by supermarkets can basically coexist.
Even in the current situation, customers, many people use both. I order things from Oisix, like meal kits thatare only available from us, vegetables that are pesticide-free, or milk that is pasteurized at low temperatures.
On the other hand, there are a lot of people who use both online supermarkets to buy things that they needright now or NB brand products.
In this sense, I think that Japanese supermarkets will continue to promote the use of the Internet, but rather
than being a threat, I think that we can coexist.
On the other hand, the model of the Tokushimaru truck takes products from supermarkets by truck, and I am
thinking of making it possible to make reservations online in a little while. Right now, we just send a truck andsay we have arrived, but if we get requests from customers to bring their favorite Daifuku, for example, weare considering making it possible to make reservations online. If we can do this, I think we can work together
with supermarkets to create a service that is similar to home delivery services for people with low Internet
literacy.
Sato: Thank you very much. Now for the last question. What are you currently doing in collaboration with
Otoya? Please let us know if you have any plans for the future.
Takashima: I cannot be too specific, because there are other parties involved, but we are continuing to discuss
the possibility of collaborating on meal kits, or even frozen foods. Discussions are ongoing. I think we will beable to release some products by the end of H1 of the year.
We also talked with other companies in the Colowide Group besides Otoya, such as Gyukaku and Freshness
Burger, who have various brands, and if there is anything we can do together, let’s work together. We havebeen talking about collaboration while expanding the scope of our discussions, and I think some of them will
start within this year.
Sato: These are all the questions I received. Thank you very much for all your questions.
This concludes the financial results briefing.
Thank you very much for taking time out of your busy schedule to join us today. Excuse me.
Takashima: Thank you very much.
[END]______________
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