FY 3/2020 2Q Results
Explanatory Materials

Oisix
November 14, 2019

Table of Contents

1. FY 3/2020 2Q Achievements
2. Results on Business segment

3. Future Growth Strategy
4. Topics
5. APPENDIX・DATA SHEET

1

1. FY 3/2020 2Q Achievements

2

Executive summary✔ Sales, EBITDA, and operating income areprogressing steadily compared to initial forecasts.

✔ Sales increased 8.1%, EBITDA decreased 6.6%due to increase Oisix expenses and other factors
YoY on an adjusted like-for-like basis*.
＊See special factors on next page3

Special factor in comparison withthe same period of the previous year

【FY 3/2019】① Radish Boya irregular fiscal year-end
associated with the business merger

・・Due to a change in the consolidated fiscal year of Radish Boya, FY2019/3
includes one extra month (4-months in 1Q resulting in 13-months total)・・The section marked “Exclude special factors” excludes the March 2018
performance of the Radish boya business.
(sales: approx. 1.600 billion, operating income: approx. 0.07 billion).

② Tax effects from merger of Radish Boya・・Tax effects of operating loss carryforwards and deferred tax assets
resulting from the merger of Radish Boya (About 1.2bn yen)

【FY 3/2020】③ New consolidation through M&A・・The performance of WELCOME co.,Ltd.(DEAN & DELUCA), an affiliated company, havebeen consolidated from the first quarter appling the equity method, and goodwill
amortization has been incurred. (consolidated for this financial result)・・The performance of Purple Carrot, a subsidiary, will be consolidated from the third quarter,and goodwill amortization will be incurred. (not consolidated for this financial result)4

2Q Highlights
Sales increased compared with the same period of the previous year,

EBITDA and operating income decreased due to increased Oisix expenses etc.,

Sales

32.55bn yen EBITDA 1.34bn yen（vs Target ±0％）

Operating
Profit0.90bn yen（vs Target +17％）（vs Target +7％）

Net income
Attributable toowners of theparent0.39bn yen
5※For the purposes of like-for-like YoY comparisons,
one extra month of Radish Boya data (March 2018)
was deducted from FY 2019/03 data.

Consolidated Results Overview

Sales increased compared with the same period of the previous year,
EBITDA and operating income decreased due to increased Oisix expenses etc.,

Sales

EBITDA

32.55

bn yen30.12

FY
2018/32Q

FY
2019/3
2Q

1.43

0.63
0.39

FY
2020/32Q

FY
2017/3
2Q

FY
2018/32Q

FY
2019/32Q

0.90

bn yen

1.34

1.04

0.27

FY
2020/32Q

FY
2017/32Q

0.23

FY
2018/32Q

0.90

Exclude special factors

FY2017/32Q円bn yenExclude special factors

10.71

1.34

32.55

Exclude special factors

18.93

Operating Profit

FY
2019/32Q

FY
2020/3
2Q

6

EBITDA comparison
with FY3/2019 2Q※For the purposes of like-for-like YoY comparisons,
one extra month of Radish Boya data (March 2018)
was deducted from FY 2019/03 data.

Despite sales growth, profit decreased
due to increased new promotional expenses and other factors
EBITDA（bn yen）

Major increase in costs3

Increase in Marginal
profitdue to increase
In entire business

0.49

0.23
0.20

1.44

*Exclude special factors
FY2019/3 2Q

Increasecosts dueto Oisix
prime pass

Increasein new
promotionalin Oisix2

Increasein fixed
costs, etc.

・Large-scale promotions of 1Q
・Strengthen promotions in Sep.
when lifestyle changes

0.07
0.09

1

Promotional in Oisix

1 0.23bn yen

Temporary
expensesfor Oisix
expansion

4

0.01

1.34

Increasecosts inDaichi andRadish Boya

Temporary expenses for Oisix

2 expansion 0.20bn yen

・Additional warehouse leasing expenses,
transport expenses, etc. due to the rapid
growth3

Oisix prime pass
0.07bn yen
・Discounts cost：Upfront investment toimprove LTV

4 Daichi and Radish-Boya
0.09bn yen

FY2020/3 2Q

・Increase in fixed cost ratio due todecrease in sales

7

Net Income comparison
with FY3/2019 2Q※For the purposes of like-for-like YoY comparisons, one
extra month of Radish Boya data (March 2018) was
deducted from FY 2019/03 data.
*Excluding the effect of reduced corporate tax (approx.
150 million in the first half) resulting from the merger ofRadish boya

Net income decreased due to a decline in operating income and afall in equity-method income taxes
Net income attributable to owners of the parent （bn yen）

6.7

*Exclude special factors
FY2019/3 2Q

Decreasein operating profit

1.4
0.8
0.6
Welcome Co., ltd
equity method goodwill
amortisation

3.9

OthersFY
2020/3 2Q

8

Business segment Results
Sales

Oisix

※For the purposes of like-for-like YoY comparisons,
one extra month of Radish Boya data (March 2018)
was deducted from FY 2019/03 data.

Marginal profit

16.52bn yen 1.86bn yen(YOY +20%)(YOY ▲4％)Daichi5.13bn yen 0.88bn yen

Radish Boya

7.45bn yen 1.27bn yen(YOY ▲6%)(YOY ▲11％)

Other
Business(YOY ▲8％)(YOY ▲16％)

3.53bn yen 0.56bn yen(YOY +32%)(YOY＋87％)

Overview
・Accelerate growth by capturing
increased demand for meal kits・Upfront investment to expand
customer acquisition

・curbed promotions and completed
operations excellence and service
level improvement work
・Start of service creation
・Increase in fixed cost ratio due todecrease in sales
・curbed promotions and continuous
operations excellence and service level
improvement work
・Increase in fixed cost ratio due todecrease in sales

・Increasing profits by making foods
wholesale business for nurseries
profitable
・Steady growth in alliance business9

Business segment Results Overview
Sales

32.55
Other
Businessbn yenMarginal profit
margin15.8％

Segment costs

Total segment costs

RadishBoya

Daichi

Marginal profit
marginSegment costs

17.1％

Marginal profit
margin27.97bn yen

Segment costs

17.2％
Marginal profit

4.58
Marginal profit
margin

Oisix

11.3％

Segment costs

bn yenCompanywide fixed costs,
Goodwill etc

3.68bn yen
Operating Profit

0.90

bn yen10

2. Results on Business segment

11Overview of Business Segments① Domestic Delivery business（Three major brands）
Oisix
Daichi
Radish Boya
② Domestic Delivery business（Other）

EC support business for other companies（Alliance）
Tokushimaru（Subsidiary）③ Other Business
Overseas Business
Real Retail Business

12Overview of Business Segments

Domestic Delivery business（Three major brands）
Domestic Delivery business（Other）① Domestic Delivery business（Three major brands）

Other Business

Oisix
Daichi
Radish Boya
② Domestic Delivery business（Other）

EC support business for other companies（Alliance）
Tokushimaru（Subsidiary）③ Other Business
Overseas Business
Real Retail Business13

Domestic Delivery business（Three major brands）

Oisix KPI

Domestic Delivery business（Other）

Other BusinessNo. of subscribers: Increased more than 20% year-on-year, despite the impact
of initial customer withdrawals gained through large-scale promotions in 1Q.
ARPU: Decreased due to an increase in new light users as a result of large-scale
promotion

No. of subscribers

ARPU※

230,556（YoY ＋21.8％）

10,616yen
225,553

230,556（YoY ▲4.6％）

FY2019/3
FY2020/3

205,976
11,562

197,272

11,534

189,352
179,942

11,183

11,127
11,244

10,616FY2019/3

FY2019/3

FY2019/3

FY2019/3

FY2020/3

FY2020/3

1Q

2Q

3Q

4Q

1Q

2Q

1Q

2Q

3Q

*ARPU=Average Monthly Revenue Per User

4Q

14

Domestic Delivery business（Three major brands）

Oisix KPI

Domestic Delivery business（Other）

Other Business

Exceeded 130,000 by capturing growing demand for meal kits.
Significant year-on-year growth of over 150%
No. of meal kit course subscribers(Includes Oisix subscribers)

134,895（YoY +54.6％）

Feature of Kit Oisix
１
Delivers volumes/quantities of food

134,895

suitable for a given family size. Allows
preparation of the main dish and side

128,551

dish in 20 minutes.
111,1692
All menus contain five or more

94,841

types of vegetables and reflect

87,232consideration for well-balanced

79,674nutrition.

3
Uses only safe, reliable ingredientsfrom farmers and manufacturers
under contract to us.
FY2019/3

FY2019/3

FY2019/3

FY2019/3

FY2020/3

FY2020/3

1Q

2Q

3Q

4Q

1Q

2Q

15

Domestic Delivery business（Three major brands）

Oisix Topics

Domestic Delivery business（Other）

Other Business

Advertisements sending ale to mothers raising children collaborative withan animation “Crayon Shin-chan” has gone viral, and media exposure
increased, such as 13 TV publicities etc., attracting consumer interest
Cumulative Twitter word-of-mouth reviews of Oisix
Total No. of tweets

Total of 230,000 tweets
YoY 289%
2019
2018
April

No. of TV
Publicities

May

2

June

1

July

August2

September

62

Collaborative
advertisements© Yoshito Usui, Futabasha, Shinei, TV Asahi, and ADKDomestic Delivery business（Three major brands）

Oisix Topics

Domestic Delivery business（Other）

Other Business

Service development following the Kit Oisix has also progressed steadily,releasing services for new value propositions such as menu and food set forseveral days and expansion of flat-rate services.
Oisix Business Sales Trends（bn yen）“Chanto” Oisix*

349

The number of users ofmaterials and menu set “Chanto
Oisix” for those who do not likecut vegetables has exceeded
10,000.
As a new service following “Kit
Oisix”, we will continue to refine
and plan to expand promotions.

296
247
230

Oisix Prime Pass

Accelerate growth

FY2017/3FY
2018/3FY
2019/3The “Oisix Prime Pass”
launched at the end of Junealso performed well.
Cost impacts from discounts
in the short term, but there
are signs of LTV improvement

FY
2020/3
forecast*The number of "Chanto Oisix" members is included in the number of "Kit Oisix" members.

17

Oisix Topics

Domestic Delivery business（Three major brands）
Domestic Delivery business（Other）

Other Business

Sales of Vegan Kit supervised by U.S. subsidiary
Purple Carrot started in October.
Creating a market where you can enjoy "Part-time Vegan" in Japan

Vegan Meal Kit

developed Japan's first "Vegan✔ Jointly
foodstuffs and recipe menu set."More than 10 types of vegan recipes arescheduled to be deployed by the end of
the year.

✔ Real events are also held with the aim ofdriving the Japanese market for "Parttime Vegan."18

Domestic Delivery business（Three major brands）

Oisix Topics

Domestic Delivery business（Other）

Other Business

The production function has been relocated to a new factory, even thoughtemporary sales out and costs increase due to growth beyond what Kit Oisix
expected. Logistics manufacturing capacity increases and stable operation is
expected from the second half.
Boosting Kit Oisix manufacture capacity

Yokohama
Process center

Kanagawa Prefecture

NEW

Ebina
StationStart of new Kit Oisix
process center in
Kanazawa-ku, Yokohama
from September
19Domestic Delivery business（Three major brands）

Daichi KPIDomestic Delivery business（Other）

Other BusinessNo. of subscribers：
Continuing to prioritize product/service design and in the curbing of inefficientchannels in the area of customer acquisition.
ARPU：
Increased owing to analysis of customer acquisition channels and effects ofexisting customer purchase frequency/ customer baskets.

No. of subscribers

ARPU※

37,587

21,443yen（YoY △14.3%）
44,111

43,835（YoY ＋10.6％）

42,996
40,21038,571

21,44337,587

21,848FY2019/3
FY2020/3

21,232
20,122
19,75819,386FY2019/3

FY2019/3

FY2019/3

FY2019/3

FY2020/3

FY2020/3

1Q

2Q

3Q

4Q

1Q

2Q

1Q

2Q

3Q

*ARPU=Average Monthly Revenue Per User

4Q

20

Domestic Delivery business（Three major brands）

Daichi Topics

Domestic Delivery business（Other）

Other Business

Progress in service creation and completion of preparations for expansion
Membership volume bottoms out during the 3Q and aims for renewed growth in 2H

Improving Operational Excellence Services

Trial
Periodicconversion

Purchase
DeliverySettlement

Service creation

・Improve the appeal of thetrial set with PDCA
・Improve the appeal of thesubscription service and change
all new customers to use it
・Improved UI for shoppingon the top page after login
・ Introducing a cool bag in summer
・ Optimize material quantity while
maintaining quality
・ Careful communication
design for annual fee billing

Improve negatives of services in line withcustomer behavior, and achieve a balance
between Acquisition and cancellation"Mai-nichi Yasai Okazu Set"
A set of foodstuffs delivered withfive days' worth of vegetables andother side-dishes
To a service in which customers
feel that they are connected to
the fields through a healthy
dining table

21

Domestic Delivery business（Three major brands）

Radish Boya KPI

Domestic Delivery business（Other）

Other BusinessNo. of subscribers：
Continued decline owing to improved profitability of existing subscribers
and curbing of new customer acquisitions.
ARPU：
Increased owing to a reduction in unprofitable users
and the resulting improvement in average customer baskets.

No. of subscribers

ARPU※

59,927

18,277yen（YoY +6.4％）（YoY △16.9%）

FY2019/3
FY2020/3

18,98874,94918,277

72,104
66,23363,461

61,50759,92718,301
17,277FY2019/3

FY2019/3

FY2019/3

FY2019/3

FY2020/3

FY2020/3

1Q

2Q

3Q

4Q

1Q

2Q

1Q

17,264

17,177

2Q

3Q*ARPU=Average Monthly Revenue Per User

4Q

22

Domestic Delivery business（Three major brands）

Radish Boya Topics

Domestic Delivery business（Other）

Other Business

While efforts to reduce unprofitable orders have been completed, the company will continue to prepare
for further expansion and create services. As a result, membership is expected to continue declining
during the current fiscal year.
Reducing unprofitable orders

Improving Operational
Excellence Services

Trial・ Upgrading vegetable quality
in a trial set

・ Improving conversion rate
based on success stories fromother brands
・ Abolishment of vegetable sets
Purchasewith low customer support
Periodicconversion

Since last year's revision to the delivery fee,
we have continued to increase basket priceby strengthening the periodic purchase andsales promotions for daily-use products, andby instilling purchasing habits.

Reduced unprofitable orders fromabout 40% before integration to about
6% at the end of the first half

Delivery・ To reduce the number ofboxes delivered

Continue to reduce cancellation and improveacquisition by eliminating negative services
Go ahead and create a “balance between
acquisition and cancellation”
23Domestic Delivery business（Three major brands）

Integration synergy ofthree brands

Domestic Delivery business（Other）

Other Business～FY2019/03
・Launch of Daichi or Radishnoya
sales corner in Oisix
Sales: ０.33bn yen/year

Marketing・Improvement in the cost of acquiring
users of Daichi and Radish Boya
⇒Approximately halved compared tobefore integration
・Streamlining promotional andpromotional expenses
Sales: ０.80bn yen/year

Fulfillment

・Decrease in distribution center costs
due to the integration of small-scale
distribution bases (Wako Depot)
Costs: ０.02bn yen/year
・ Standardization of packaging
materials
Costs: ０.02bn yen/year
・ Efficiency of settlement costs
Costs: ０.05bn yen/year

・ Increasing efficiency of back office
Costs: ０.16bn yen/year

FY2020/03 1Hfrom now on

・Developing new services on Daichi・ Introduction of crossand in Radish by leveraging Oisix's
promotion methods
know-how in introducing new・・Distribution of fish or new rice
services
・・Oisix non-food promotion
・・Early acceptance of orders, etc.
・Use of marketing synergies with・Horizontal deployment ofOisix in the nursery school wholesale
expertise in improving the UX
business that had been owned byof EC websites
Radish Boya
・・Changes to the redemption
page UX, etc.
・ Flexible collaboration to
support disaster-stricken areasin the event of a disaster・Decrease in distribution
center costs due to integrationof small-scale distribution
bases (Kohoku Depot)
Costs: ０.02bn yen/year
・ Interchange to accommodate
the capacity of distribution
centers by consolidating BtoB
bases
・ Decrease in out-of-stocks
due to supply adjustments
between brands

・Optimize logistics centers(partially completed)・Organizing the three-brandproducer network "ORD
Producers' Association(tentative)"
・Standardization of the in-houseinfrastructure system

24Overview of Business Segments

Domestic Delivery business（Three major brands）
Domestic Delivery business（Other）① Domestic Delivery business（Three major brands）

Other Business

Oisix
Daichi
Radish Boya
② Domestic Delivery business（Other）

EC support business for other companies（Alliance）
Tokushimaru（Subsidiary）③ Other Business
Overseas Business
Real Retail Business25

Domestic Delivery business（Three major brands）

Alliance projects

Domestic Delivery business（Other）

Other Business

Steady expansion of EC support businesses utilizing our strengths of"Subscription e-commerce know-how" and "logistics schemes"
d-meal kit✔ In just 2 months since launch,
8,000 trial sets were sold and over 1,000

ISETAN DOOR

✔ Exceeded 14,000 user the fastest
rate in our EC-support business

new subscriptions were secured. Going well.

26

Domestic Delivery business（Three major brands）

Tokushimaru(subsidiary)

Domestic Delivery business（Other）

Other Business
The pace of increase in the number of vehicles in operation is rising,and it has grown to 440.
The value of circulation is also expected to grow significantly,
and total transaction value is expected to exceed 10 billion in this fiscal year.

The value of circulation

4.98

Development Scale
Number of affiliatedsupermarkets

bn yen118（YoY ＋35.5%）

Number of vehicles
in operation

440

4.98
3.67

2.53
1.55
0.54

FY2016/3

FY2017/3

FY2018/3

FY2019/3

FY2019/3

2Q

2Q

2Q

2Q

2Q

27

Overview of Business Segments

Domestic Delivery business（Three major brands）
Domestic Delivery business（Other）① Domestic Delivery business（Three major brands）

Other Business

Oisix
Daichi
Radish Boya
② Domestic Delivery business（Other）

EC support business for other companies（Alliance）
Tokushimaru（Subsidiary）③ Other Business
Overseas Business
Real Retail Business28

Domestic Delivery business（Three major brands）

Overseas Business

Domestic Delivery business（Other）

Hong Kong/China：

Other Business

Implementing a revamp of services for the people of Hong Kong and China.

U.S.(Purple Carrot)：
Reduced error rate through measures to change packaging materials.

Oisix Hong Kong

U.S.(Purple Carrot)✔ With the aim of identifying

and establishing a winning
pattern to attract customers
in Hong Kong,
we are implementing new
strategies away from trial sets.

Oisix Shanghai✔ With the aim of establishing✔ The error rate has been reduced

by approximately 20%
due to efforts to change materials.

a Chinese subscription model,
CXO will be based in China
to identify needs✔ We also reduced the rate of complaints
and formulate strategies.
by approximately 20% through ongoing
efforts with distribution partners.
29

Domestic Delivery business（Three major brands）

Real Retail Business

Domestic Delivery business（Other）

Other Business
Sales grew at both SinS/ Kindergarten Wholesale. In particular,
the wholesale nursery business returned to profitability in the first half of the fiscal year
due to a significant improvement in its earnings structure.
We accelerate expansion of business partners in the future

Shop in Shop

Kindergarten Wholesale

Sales

0.41

Sales

0.50

bn yenNo. of tradingkindergartens

No. of shops

145

bn yen

0.39

0.41
0.37

367

0.50
0.3６

0.20

0.18

0.04
FY2017/3

FY2018/3

FY2019/3

FY2020/3

FY2017/3

FY2018/3

FY2019/3

FY2020/3

2Q

2Q

2Q

2Q

2Q

2Q

2Q

2Q

30

Domestic Delivery business（Three major brands）

DEAN & DELUCA（affiliate）

Domestic Delivery business（Other）

With DEAN & DELUCA, which became an affiliate in May,

Other Business

we will strengthen joint efforts to develop Kit Oisix recipes and “Osechi”.

Homemade scone Kit

2020 “Osechi” collaboration

31

Domestic Delivery business（Three major brands）

Nihon Agri（affiliate）

Domestic Delivery business（Other）

Other BusinessNihon Agri, which exports domestic vegetables and fruits, is seeing good businessexpansion. Sales for this term are expected to be about 2.5 times the previous year.

Initiated handling of fruits and vegetables of Oisix ra Daichi’s contracted producers.

Nihon Agri✔

Led by apples from Aomori Pref., we are
implementing a program of exports.
Recently, the fruit and vegetable producers withwhich we have contracts have also begun
participating. This has served to expand item
selection.Led by Thailand, export destinations also
expanded to six countries.

✔

At the Catapult Grand Prix, an ICC festival of startup
companies, Nihon Agri’s business model was
evaluated highly and ultimately won.

Exports of domestic fruits andvegetables will begin with thebuilding of a value chain.
32

3. Future growth strategy

33

Future growth strategy① Business growth plan
② Profitability enhancement plan

34

Future growth strategy① Business growth plan
② Profitability enhancement plan

35

Our business portfolio
Strengthen domestic
and real businesses

Physical(20%出資)（20%
stake）
SinS

Real
Shop

Kindergarten
wholesale

Delivery

Subscription Businessgrowth in line withgrowth modelOverseas expansion ofsubscription know-how
Generation

Start-up support
using existing
businesses

Oisix
Hong Kong
Oisix
Shanghai

Focusing on convenience

Overseas

Domestic

MarketingFulfillment

SupportforStart-ups
36

Business phase of the Home
delivery businessWe own success Know-How for all business phases in subscription management

Launch of business

Completed(FY3/2020 2Q)

Creation of products
and services

Business expansion“Chanto”Oisix

・Oisix・Kit Oisix

Ongoing（"Mai-nichi Yasai Okazu Set“ Etc.,）

Ongoing(FY3/2020/3 4Q
Expected completion)

Other
business・d meal-kit
・Purple Carrot

・Tokushi-maru
・ISETAN DOOR

Success
Know-How◆Implementationof operational excellence ◆Creation of services based ◆Pursue growth
on latent needs
by investing◆Build a subscription
in promostion costs◆Experiment of acquisition-enabled system◆Introduction of subscription costs and LTV
management accounting37

リアル事業の拡大
In the kinder garden wholesale business, we turned profitable andstrengthened promotions. We aiming to introduce the system to 2,000
within a few years
Trends in numberof nursery schools in Japan

34,892
32,84730,85928,783

KindergardenUse the Kinder
garden school
lunch as a touchpoint to guidethe Oisix brand

Home

～～～～
2015

✔

2016

2017

2018

The number of nursery schools
has been increasing year by yearwith the acceleration of women's
participation in society.

Building a system that allows
children's dining tables
at Kinder garden and at home38

Building an ecosystem tostimulate food innovation
We can build an ecosystem that comprehensively supports food start-ups
utilizing our strengths in upstream to downstream networks.

Financial
SupportMatchingwith producers
Matching producers
with the introduction of Agri-Tech

Matching Producers
to expand exports

×Food
Start-ups
New
Foods

HealthCare

AgriTechSales
support“YES BAR”,
Japan's first gluten-freesnack bar on land
“CLR BAR”,
a protein-bar madesolely from vegetable
raw materials
Frozen fruitin a special frozen
technology

39

Investments by Mos Food Service
and consideration collaboration

Mos Food Services, Inc. decided to invest as a limited partner in Future
Food Fund, which was established in August of this year. We concurrent
discussions on brand collaboration
Decided to invest as LP of FFF

Considering collaboration
with the aim of developing productsin the spring of 2020

LP

Corporate venture capitalfor start-ups support

×

Start-ups
for food40

Future growth strategy① Business growth plan
② Profitability enhancement plan41

Overview of profitability
enhancement
We work to reduce products/distribution costs etc., to improve profit structure

Marginal
profitProduct
costs⇒Marginal profit +3.0pt～5.0pt■Efforts to improve product costs
1 Improvement of Procurement▲0.5pt～▲1.0pt

2 Reduce products cost

▲1.0pt～▲3.0pt

Logistics through ”VegeNeco” Projectby accelerating the shift to SPA

Price/
purchase

Logistics/
delivery costs

Other SG&A
costs

■Initiatives to improve distribution centersand distribution costs
3 Reduce distribution center costs▲1.0ptby starting operationof a new distribution station in Oisix■To reduce the ratioof fixed operating costs
4 Improve average customer spend
by strengthening product lineup▲0.3pt～▲0.5pt
42

“VegeNeco”Project
Good progress in our joint project with Yamato Transport.
Testing of joint logistical operations has been completed. We plan full-scale
operations in 4Q.
1“VegeNeco”Project ：▲0.5pt～▲1.0pt
BeforeAfterprogress✔ Testing of joint logistical

Distribution centers

・Distribution costs from producers
to us are included in the cost of
goods sold.
・Producers arranges and delivers
shipments individually, so costs are
incurred both for us and for
Producers.

Distribution centers

operations has been
completed, and it was
confirmed that significant
reduction in procurementtransportation cost can be
expected. We plan full-scale
operations in 4Q.

✔ We are aiming to use about
・By concentrating on Yamato
Transport, streamlining
logistics from production areas

1,500 producers andmanufacturers out of ourbusiness partners

43

Accelerating the shift to SPA
Rather than merely becoming a "platforms," we will improve the private Brand ratio
and reduce manufacturing costs by strengthening development and manufacturing.
2

Accelerating the shift to SPA ：▲1.0pt～▲3.0pt■Private Brands Ratio(Ratio to Sales)

73％ 57％ 58％✔ Promote mechanizationof manufacture of meal
kits, salad kits, etc.,✔ In-house meat
processing etc.,
Strengthen manufacturing
and development functions
upstream of the supply
chain to reduce product
costs
44

Investing in and reorganizing
distribution centers
In line with the rapid expansion of the Oisix, we decided to start in advance ofthe expansion and streamlining of its capacity. We will promote automation of
warehouse operations and expect to reduce distribution center costs.
3 Started operationof a new distribution station in Oisix：▲1.0pt✔ Enhancement and streamlining of logistics and Kit Oisix manufacturing capacity
through operation of new Ebina Station✔ Initial investment is expected to be approximately 3 billion,
but return on investment is expected as soon as possible
by reducing logistics center costs by 1.0pt.

◆Image ofa new distribution stationin Oisix45

Improve average customer spend
by strengthening product lineup
We will establish new product categories that we do not currently handle, as well as
product categories that are easy to appeal to high value-added customers. And, we will
improve the earnings structure per delivery by increasing the average customer spend.

4 Improve average customer spend
by strengthening product lineup

Vegetable/
Fruit

Meat/Fish：▲0.3pt～▲0.5pt

NEW

GrossaryNewcategory・・・

46

4.Topics47

Impact of typhoon disasterOccurrence fact
Due to the typhoon No. 19, which occurred in
October, Our operations at the Oisix Ebina
Station were partially suspended.
We expect to lose about 100 million yen in
profits, mainly from Oisix brands,
compared with what would have been the caseif shipped as usual.
Next Actions①

In response to this disaster, we will further strengthen ourbusiness continuity plan at the disaster.

②

We will carry out recovery
without the initial full-year Results Forecast Revisions.
48

Support for areas affectedby typhoons
We Donated and supported sales of fruit and vegetables
for typhoon-affected areas, which were severely damaged
Sales of donation soups
At Tokyo Harvest,
we set up a Chiba Pref.
support boothwhere we sold charity soup
using ingredientsfrom disaster stricken areas.

Supporting salesof non-standard products
We support sales of
non-standard productsthat have been damagedby typhoons and heavy rain

Relief supplies
We delivered Mineral water
was to Soma and Iwaki
in Fukushima Pref.,two cities that suffered
water outages owing totyphoon No. 19.

49

Tokyo Harvest 2019
“Tokyo Harvest 2019” was held at Komazawa Olympic Park for the seventh
time.45,000 visitors, far exceeding the number of visitors the previous year.

Tokyo Harvest, one of Japan’s top harvest
festivals, expressed gratitude and respect
for those who produce our food: farmers,
fisher people, and ranchers.
Tokyo Harvest is an enjoyable opportunity
to rediscover the culture, traditions, andhistory of each region and to community
information on delicious Japanese farefrom Tokyo to the nation and to the world.

50

Reduction of Food loss/
Waste Plastic
We are looking to reduce food loss and waste plastic,
both of which are social issues.
Reduction of Food loss

Reduction of Waste Plastic

During Food Loss Reduction Monthin October, we opened a special site
to communicate our efforts under
three delivery brands.

We plan to switch the plastic bags
used in Kit Oisix from to naturallymaterials

51

Wholesale business to China
As we develops delivery business in China, we began wholesalingorganic rice produced in Japan, which has high local needs.
We expand business by conducting activities to build stable sales channels
Chinese consumers

For expanding sales channels in China✔ Exhibiting at the China International
Import Expo held in Shanghai tofurther expand sales channels.

Retailer
Food company
Designated rice
milling plant

Oisix ra daichiContract
producers in
Hokkaido

Producer52

5. APPENDIX・DATA SHEET

53

Corporate Overview

Name：

Oisix ra daichi Inc.

Location：

Shinagawa-ku, Tokyo

Established：

June 2000

Representative： Kohey Takashima, Representative Director & CEO
Capital：1,686,997 thousand yen

Employees：

735 (consolidated), as of the end of March 201954

Overview of Affiliates
Consolidated subsidiaries
Tokushi-maru Inc.

Develops alliances with supermarkets in the mobile supermarket business;
provides expertise to sales partners.

Fruits Basket Co., Ltd.

Handles processing, product development, and sales,
for agricultural produce, including fruits and vegetables.

Karabiner Inc.

Develops and operates platform systems for EC sites; produces websites.

Crazy Kitchen Co., Ltd.

Handles catering, event production, and space production businesses.

Oisix Hong Kong Co.,Ltd.

Operates our businesses in Hong Kong under contract.

Oisix Shanghai Co., Ltd.

Operates the food products home delivery business in China.

Purple Carrot

Meal kit delivery service in the United States

Oisix Inc.

Overseas investment business

Affiliates
Nihon Agri Inc.

Exports agricultural products.

DEAN & DELUCA

Lifestyle business through retail and restaurant businesses
Manufacture and sale of imported and processed foods, and operation of cafes
55Trend in No. of Employees
735
680

421

163

FY2013/3

179

FY2014/3

192

FY2015/3

210

FY2016/3

FY2017/3(Consolidated)

FY2018/3(Consolidated)

FY2019/3(Consolidated)

56

Main Business Risks
Effects of poor weather
Fresh produce accounts for about 30 % of Group sales. We deploy astructure for fresh produce that makes it possible to secure supplies
from other regions if poor weather in specific regions prevents harvests
or results in poor quality. The system distributes transactions and inprinciple allows procurement of key products from multiple producer
regions. Nevertheless, poor weather lasting longer and having more

broad-ranging effects than expected may lead to product shortages andquality issues, with potential consequences for Group businesses andbusiness results.

Effects of concentrationof logistics centers

Issues related to food safety
We have established proprietary standards for the products handled for all our
major brands. Whenever possible, we seek to offer produce grown without
pesticides or chemical fertilizers. Our processed food products are made using the
fewest possible additives. We have also established unique inspection systems for
produce (including inspections of production sites and testing for residual
pesticides) and processed food products (including use of third-party experts andindependent institutions). We also strive to secure appropriate quality and safetythat can be objectively demonstrated and evaluated through health and safety
management guidance provided to suppliers and other means.
Nevertheless, it remains possible that those who produce the products we offer
may provide misleading or fraudulent labels regarding use of pesticides andsimilar matters or provide false quality information. Such cases could well lead torebuke or penalties from regulators, customer complaints, and compensation fordamages, in turn damaging the image of the Group’s brands or leading to a lossof confidence in the Group and potentially affecting Group businesses andbusiness results.

Effects of relationshipwith Yamato Transport Co., Ltd.

We operate our own logistics centers, where logistics functions such as

Most deliveries of the Group’s products to subscribers are handled byinspection, storage, sorting, and packing of our products are

Yamato Transport. While the Group strives to maintain a favorable ties

concentrated. For the most part, products under the Oisix brand areto Yamato while building relationships with alternative delivery services,shipped to customers through our logistics center located in the city of

due to current conditions in the logistics business, if the Yamato Group

Ebina, Kanagawa Prefecture. Those under the DWMK brand are shipped

were to demand a major increase in delivery fees or if transaction

through a center located in the city of Narashino, Chiba Prefecture. If a

volumes between us were to shrink, the resulting changes may affectnatural disaster, fire, or other cause were render either or both logistics

Group businesses and business results.

centers unable to operate, potential consequences include inventory
losses, shipping delay, and temporary suspension of services, which inturn would affect Group businesses and business results.

57

Our Subscription Model
Expanding our business areas to include alliances and marketing support
for other companies based on subscription model strengths in our threehome delivery brands.
consumers

Our Strength

Home delivery

Marketing forhome delivery
subscriptions

Own brand

Alliance
Managing subscriptions
to ensure thoroughmanagement ofrevenue structures
Purchasing
Producers

Subscription networkwith producers

58What Our Three Brands Deliver
Based on the distribution of safe, reliable food products, each of our threebrands delivers products tailored to the lives and values of our customers.
Working mothers withsmall children

Mothers focusing on
the home and children

Senior women in twoperson households

Meals that can be boasted
without taking time

Self realization
through Cooking

Healthy daily living

Producers

59Subscription Management
Building a subscription model that generates sustained profits
through rapid returns on investment to secure new customers
and rigorous management of per delivery revenue and expenditures
Rigorous CPA and LTV management

Rigorous managementof unit revenues and expenditures

Setting a period to recoup CPA and rigorously

Making percentages of loss-making deliveries visible

managing CPA within this range

for each unit and reducing them structurally

Building a sustained profit stream

ProfitCPA
recovery
periodPriceperpurchase

Profit LTV
Profitabledeliveries

0
Time
CPA

CPA: cost per acquisition
Profit LTV: lifetime acquisition value

Loss-making
deliveries
Subscribers

60

Subscription Network
Reducing risks and securing stable transactions through a subscription
network based on 4,000 producers nationwide and procurement undertransaction conditions arranged in advance
Typical distribution of agricultural products

Consumers

Retail store
Wholesale market

Purchase prices vary
widely withproduction
conditions.

Inability to control
volumes purchased
and prices due tomarket conditions

consumers
Purchases at stablepricing regardless ofmarket conditions

Oisix ra daichi

Facilitating demand
control/projections
through sales plans
based on projectedsupply volumes

Advance purchase commitment basedon specified product types,
quantities, timing, and prices

Agricultural cooperative

Producers

Our efforts

Revenue prospects
unclear due to pricevariations resulting
from market
conditions

Producers

Clear revenue
projections to backsound investment
decisions61Differences in the assetsof the three brands

How tojoin

How toorder

Logistics
bases

Last OneMile

WEB mainlyWEB/
door-to-door sales

WEB mainly

WEB only

WEB/
Paper catalogs/
TEL

WEB/
Paper catalogs/
TEL

1 placein Kanagawa

6 placesin Hokkaido, Miyagi,
Tokyo, Kanagawa,
Aichi, Osaka,.

1 placein Chiba

Yamato trucks
approximately 99％

Our trucks
approximately 95％（area around
Logistics bases）

Our trucks
approximately 85％（area aroundmetropolitan area）
62

International BusinessHong Kong

Oisix Hong Kong
Producers

Regularsubscribers

Hong Kong

RegulardeliveryChinabuyingup

Yamato trucks

Oisix Shanghai
Same standardsof Oisix

Regularsubscribers

Producers

China

Regulardelivery

Our trucks
Yamato trucks

buyingup

45

Shop in Shop
Setting up booths for individual brands in the produce sections of partner supermarkets
to sell produce and products that meet each brand’s standards

64Kindergarten wholesale
The kindergarten wholesale business was launched in FY2015. Based on the Omakase Boya systemthat makes it possible to order ingredients for student meals based on menus,
it provides support for kindergarten operations in both serving meals and nutrition.
Oisix ra daichi

Kindergarten

Omakase Boya system
for receiving orders from kindergartens

Producers

Ordering◆Stable purchases of safe produce andprocessed food meeting strict standards◆A wide-ranging product lineup thateliminates the need for additional purchasing

Deliveryon
Requested
date

Purchase◆Full-time senior nutritionists develop uniquemenus for use by kindergartens; they also
respond to requests for nutritional
consultations.
◆Easy ordering using a simplified Web form
◆Simplified single supplier management65

Business Solutions
We propose B2B business solutions based on our safe, reliable products,
outstanding customer base, and expertise in subscription-based EC.

EC consulting
Solutions support basedon our expertise in repeat marketing,site user interface/user experience
improvements,
food logistics in three temperaturezones, securing new EC customers,
and omni-channel management

Ad Oisix:

Tavelty：

Periodic advertisements
delivered to subscribers

seasonal vegetablenovelty products

In addition to an EC site that boasts 1.2
million unique views per month, thisservice delivers advertising to about
300,000 households, including
subscribers to DWMK and Radish Boya.

We offer novelty products basedon our expertise in service,products, and delivery, establishedthrough more than 3 million
regular deliveries a year.

66Tokushimaru
Offering mobile supermarkets for seniors and “shopping refugees” difficult
to approach via the Internet
Business model
Tokushimaru
Headquarters
Contractual fees
Royalties

Brands, expertise,
information provision

Regional supermarkets
Bases for supply of products

13％
Products

Product gross profits
30％
17％

Sales partners

In-person
sales

Owner-operators＋5 yen＋5 yenCustomers+10 yen rule67

DATA SHEET：Results
Results
FY2017/3

FY2018/3

（mn
yen）

1Q

Sales

5,379 10,718 17,113 23,016

2Q

3Q

4Q

1Q

2Q

3Q

FY2019/3

4Q

1Q

2Q

3Q

FY2020/3

4Q

1Q

2Q

9,602 18,935 30,007 39,987 16,853 31,720 48,906 64,026 16,265 32,552

Operating Profit

169

270

625

752

141

237

692

891

610

1,115

2,265

2,312

543

900

EBITDA

225

391

810

996

320

635

1,282

1,670

808

1,513

2,882

3,154

755

1,348

Net
incomeAttributabl
e toowners ofthe parent

119

187

429

515

72

93

336

237

537

893

2,533

2,387

270

390

68

DATA SHEET：Business Segment Result
Business Segment Result
FY2018/3（mn yen）

FY2019/3

FY2020/3

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

Sales

5,790

11,47018,481

24,7996,863

13,76922,19029,6198,308

16,524

Marginal
profit

674

1,392

2,421

3,288

970

1,943

3,371

4,036

933

1,868

Sales

2,790

5,487

8,508

11,215

2,769

5,440

8,405

10,902

2,587

5,137

Marginal
profit

539

1,078

1,650

2,095

479

960

1,536

1,989

457

885

Sales

-

-

-

-

5,811

9,926

14,34618,028

3,770

7,459

Marginal
profit

-

-

-

-

1,030

1,765

2,657

3,342

688

1,273

Sales

1,109

2,163

3,263

4,250

1,482

2,755

4,198

5,793

1,663

3,529

Marginal
profit

185

384

571

760

154

290

479

724

256

557

Companywide fixed
costs,
Goodwill etc

1,257

2,853

3,951

5,253

2,024

3,844

5,779

7,779

1,792

3,683

Oisix

Daichi

Radish Boya

OtherBusiness69

Data Sheet：Main KPIKPI trend
FY2018/3

Oisix

Daichi

RadishBoya

FY2019/3

FY2020/3

4Q

1Q

2Q

3Q

4Q

1Q

2Q

Subscribers(number)

169,664

179,942

189,352

197,272

205,976

225,553

230,556

ARPU
（yen）

11,602

11,562

11,127

11,534

11,183

11,244

10,616

5,925

6,002

5,973

6,150

6,015

5,887

5,839

1.96

1.93

1.86

1.88

1.86

1.91

1.82

Subscribers(number)

44,933

44,111

43,83542,996

40,21038,571

37,587

ARPU（yen）

19,24020,122

19,386

21,84819,75821,232

21,443

7,726

7,770

7,553

8,529

7,811

7,990

8,026

2.49

2.59

2.57

2.56

2.53

2.66

2.67

Subscribers(number)

78,062

74,94972,101

66,233

63,14461,50759,927

ARPU（yen）

16,63917,277

17,177

18,98817,26418,301

18,277

5,278

5,460

5,616

6,114

5,869

6,055

6,060

3.15

3.16

3.06

3.11

2.94

3.02

3.02

Price/
purchase（yen）
Purchase
Frequency(number)

Price/
purchase（yen）
Purchase
Frequency(number)

Price/
purchase（yen）
Purchase
Frequency(number)70

Disclaimers◆This material is intended to provide an understanding of Oisix ra daichi activities,

not to solicit investment◆Forecasts of Oisix ra Daichi’s operating results and future performance are based on information

available to Oisix ra daichi at the time this material was drafted and are not guaranteed to beaccurate.
Actual operating results may differ from the future outlooks contained in this material.

71