Fiscal Year Ended March 31, 2023

Financial Results Briefing Materials
RENAISSANCE INCORPORATED(Tokyo Stock Exchange Prime Market: 2378)

Table of Contents
1. Financial Highlights for Fiscal Year Ended March 31, 2023

‥2

2. Overview of the Sports Club Business for Fiscal Year
Ended March 31, 2023

‥9

3. Major Topics for Fiscal Year Ended March 31, 2023

‥13

4. Store Openings and Closings During Fiscal Year Ended
March 31, 2023

‥26

5. Outlook for Fiscal Year Ending March 31, 2024

‥30

6. Medium- to Long-Term Direction‥38

Reference Information‥62

1

1. Financial Highlights for
Fiscal Year Ended March 31, 2023

2

Consolidated/Non-Consolidated Income Statements(Millions of yen)
Fiscal Year Ended
March 31, 2022

Fiscal Year Ended
March 31, 2023

Year-on-Year

37,12040,760+9.8%

Operating income

912

680

(25.5%)

Ordinary income
Net income
attributable to ownersof the parent company

632

311

(50.8%)

513(1,141)

Negative

Consolidated
Net sales(Millions of yen)
Fiscal Year Ended
March 31, 2022

Fiscal Year Ended
March 31, 2023

Year-on-Year

36,83040,244+9.3%

Operating income

974

737

(24.3%)

Ordinary income

564

302

(46.5%)Net income (loss)

441(1,204)

Negative

Non-consolidated
Net sales3Management Decisions Based on Changes in theExternal Environment, Etc.
In light of rising heating and lighting expenses due to soaring resource prices and other factors,
we have reviewed assumptions in the business environment, and recorded extraordinary losses
and reversed deferred tax assets
 Recording of extraordinary losses• Impairment losses on fixed and leased assets
Impairment loss of 518 million yen was recorded, including 19 operating facilities whose
profitability has declined• Impairment loss on goodwill of BEACH TOWN CORPORATION
Review of BEACH TOWN’s goodwill resulted in an impairment loss of 80 million yen
 Reversal of deferred tax assets
After careful consideration of the recoverability of deferred tax assets, deferred tax assets
were reversed and 749 million yen was recorded as income tax-deferred

4Factors for Increase and Decrease in Consolidated
Operating Income (Year-on-Year)
While net sales increased significantly year-on-year, income decreased due to soaring heating
and lighting expenses and other factors(Millions of yen)

Operating
Income for
Fiscal 2021

+3,640

Increase in
Net Sales

Sales
Promotion
Expenses

Personnel
ExpensesUtilities
Expenses

Other
Facility
Expenses

Other
Expenses

Breakdown of Cost of Sales for Sports Clubs

Other Costs

Head Office
Expenses

Operating
Income for
Fiscal 20225

Consolidated Net Sales by Division(Millions of yen)
Fiscal Year Ended Composition Fiscal Year Ended Composition
Year-on-Year
ratio
March 31, 2022
March 31, 2023
ratio

Fitness Division Total

16,23543.7%

17,85343.8%+10.0%

Swimming school

8,838

23.8%

9,781

24.0%

+10.7%

Tennis school

3,747

10.1%

3,905

9.6%

+4.2%

Other schools

1,128

3.0%

1,292

3.2%

+14.5%

School Division Total

13,71537.0%

14,979

36.8%

+9.2%

Shop Division Total

770

2.1%

798

2.0%

+3.6%

Other Income Total

3,423

9.2%

3,900

9.6%

+14.0%

Total Net Sales - Sports
Facilities

34,14492.0%

37,531

92.1%

+9.9%

Entrusted Management

844

2.3%

689

1.7%

(18.4%)

Nursing Care andRehabilitation

1,484

4.0%

1,687

4.1%

+13.7%

Other Net Sales

646

1.7%

852

2.1%

+31.8%

Other Net Sales Total

2,131

5.7%

2,540

6.2%

+19.2%

Total Net Sales

37,120100.0%

40,760100.0%+9.8%(beauty salon, massage, etc.)

6Consolidated Balance Sheet(Millions of yen)
Fiscal Year Ended
March 31, 2022

Fiscal Year Ended
March 31, 2023

Current
assets

7,674

8,784

+14.5% Increase in cash and deposits, etc.

Fixed assets

30,51433,461

+9.7%

-

27

38,18942,272+10.7%

Current
liabilities

9,684

10,341+6.8% Increase in short-term borrowings, etc.

Fixedliabilities

18,182

20,939

Increase in lease obligations due to new store+15.2% openings, issuance of convertible bond-typebonds with share acquisition rights, etc.

Total Liabilities

27,86731,281+12.3%

Deferred
assetsTotal Assets

Year-onYear

Major Factors for Increase and Decrease

Increase in leased assets due to new store
openings, etc.
Issuance of Class A shares and convertible bondtype bonds with share acquisition rights

Total Net Assets

10,321

10,991

Total Liabilities
and Net Assets

Increase in share capital and legal capital surplus+6.5% due to issuance of Class A shares, decrease inretained earnings, etc.

38,18942,272+10.7%

7

Consolidated Statement of Cash Flows(Millions of yen)
Fiscal Year Ended
March 31, 2022

Fiscal Year Ended
March 31, 2023

Highlights of Fiscal Year Ended March 31, 2023

Increase in depreciation and amortization expenses
1,614 and long-term accounts payable - other, decrease inaccrued consumption taxes, etc.
Purchases of property, plant and equipment, and(4,238) acquisition of shares in subsidiaries and associates,
etc.
Issuance of shares and convertible bond-type bonds
3,350 with share acquisition rights, long-term and short-termborrowings, etc.

Cash flows from operating
activities

3,819

Cash flows from investing
activities(1,421)

Cash flows from financing
activities(4,555)

Net increase (decrease) in cash
and cash equivalents, etc.

(2,239)676

Cash and cash equivalents at
beginning of period

7,095

4,855

Cash and Cash Equivalents at End
of Period

4,855

5,532

8

2. Overview of the Sports Club Businessfor Fiscal Year Ended March 31, 2023

9

Number of Members by Division(Members)
March 31, 2022

Composition
ratio

March 31, 2023

Composition
ratio

Year-on-Year

Fitness Division
Total

161,67648.6%

178,26747.7%+10.3%

Swimming
school100,58830.2%

103,382

27.7%

+2.8%

Tennis school

34,435

10.3%

34,3179.2%(0.3%)

Other schools

18,905

5.7%

20,713

5.5%

+9.6%

School Division
Total

153,92846.2%

158,412

42.4%

+2.9%

Online Total

17,297

5.2%

36,9369.9%+113.5%

Total Number ofMembers

332,901

100.0%

373,615100.0%+12.2%*Number of members in the fitness and school divisions include members of directly
managed facilities in Japan*Other schools include school-based fitness programs*Including those who have put their membership on freeze

10Number of New Members(Members)
50,00045,00040,00035,00030,00025,00020,00015,00010,000
5,000
0

1Q

2Q

3Q

4Q

1Q

FY2020

Total

Fitness division

3Q
FY2021

School division

Period of declaration of state of emergency and Issuanceof quasi-emergency measures against COVID-19*Only directly managed facilities in Japan

2Q

4Q

1Q

2Q

3Q

4Q

FY2022 The number of new members generally
remained steady, and the total number of new
members for the full year exceeded 90% of preCOVID-19 levels

11Number of Members Whose Memberships Are on Freeze(Members)
300,000
250,000
200,000
150,000
100,000
50,000
0

1Q

2Q

3Q

4Q

1Q

FY2020
Total

Fitness division

3Q
FY2021

School division

Period of declaration of state of emergency and Issuance ofquasi-emergency measures against COVID-19*Only directly managed facilities in Japan

2Q

4Q

1Q

2Q

3Q

4Q

FY2022 The number of members who have put theirmembership on freeze fell below pre-COVID
levels for both fitness and school members
12

3. Major Topics for Fiscal Year
Ended March 31, 2023

13

Sports Club BusinessOpening of three new integrated sports clubs
Even during the pandemic, new medium- to large-sized sports clubs were newly opened,creating a base to promote the health of local residents and revitalize communities

 Renaissance Aeon Town Fujimino
24 (Fujimino-shi, Saitama) Renaissance Ebina Vina Gardens 24(Ebina-shi, Kanagawa) Renaissance Maita 24(Yokohama, Kanagawa)Compound-type rehabilitation facilities(as stated on p.17) are attached14

Sports Club Business
Efforts to make sports clubs more enjoyable and effective for customers
Launched “RENAISSANCEColors,” a fan community site that allows customers to interact witheach other, leading to more enjoyable health promotion. Also developed and marketed “Gungun
Nobirune,” a private brand of supplements for growing children Fan community site “RENAISSANCEColors”

 Private brand supplement “Gungun Nobirune”

15

Nursing and Rehabilitation BusinessDirectly managed composite-type facility for nursing and rehabilitation
opened in Maita

Opened a compound-type facility for nursing and rehabilitation attached to Sports
Club Renaissance Maita 24
Supporting community health promotion through the provision of rehabilitation
tailored to the concerns of users Rehabilitation Center Maita(Day-care facility specializing instroke care) Rehabilitation Station Maita(Home-nursing station)

 Genki Gym Jr. (Junior) Maita(Child development support and afterschool daycare service)16

Nursing and Rehabilitation Business
Strengthening the franchise development of “Genki Gym,” a daycare
service specializing in rehabilitation
Strengthened sales structure for franchise development and opened four new
facilities, including Genki Gym’s first outlets in the Kyushu and Hokkaido areas

 Genki Gym Oizumi
Gakuen (Nerima-ku,
Tokyo) Genki Gym Iwaki Chuodai(Iwaki-shi, Fukushima) Genki Gym KagoshimaChuo (Kagoshima-shi,
Kagoshima)- First Genki Gym in the
Kyushu area

 Genki Gym Obihiro Jiyugaoka(Obihiro-shi, Hokkaido)- First Genki Gym in the
Hokkaido area
17

Exercise Support for Cancer Survivors
Offer online programs to help cancer survivors improve their quality of life
Specialized online programs and free lesson events are held as an opportunity for cancer
survivors to exercise more casually and safely, and to feel refreshed and cared for “Breast Cancer Yoga” and “Breast Cancer Exercise” introduced on  Free online lesson events, including classes such as“RENAISSANCE Online Livestream,” an online lesson-streaming“Breast Cancer Lymphatic Care Yoga” and “Physicalservice
Fitness Exercises for Cancer Survivors”
Instructed by an instructor specializing in oncology certified by
Osaka International Cancer Institute18

Business for Companies and Health Insurance
Associations
Support for health promotion through online lesson services

Expanded services for “RENAISSANCE Online Livestream,” an online lesson-streaming service,and steadily increased the number of users through companies and health insurance
associations
 Increased the number of lessons, introduced new
programs and expanded capacity, etc.
Steady increase in the number of users, including
members of SUMITOMO LIFE’s “Vitality”
 Started to provide services to “KENCO SUPPORTPROGRAM,” a comprehensive support tool for Kenkokeiei*
for small and medium-sized enterprises offering by Daido
Life Insurance Company
KENCO SUPPORT PROGRAM
This web service provides consistent support for implementing the PDCA cycle
required for KENKOKEIEI “Health and Productivity Management,” including “support
for promoting health checkups” for companies, “analysis of the risk of developing
lifestyle-related diseases” for management and individual employees, and “healthpromotion solutions” and “incentives” to encourage ongoing health promotion efforts.

* “Kenkokeiei (Health and Productivity Management)” is a registered trademarkof Nonprofit Organaization Kenkokeiei

19Businesses for Local Communities and Municipalities
Support for community development utilizing the “Regional Revitalization
Entrepreneur Program,” etc.

Dispatched our company’s employees to 16 municipalities to resolve local health issues andpromote local revitalization by publicizing the municipalities to which the employees are sent<<Local municipalities
to which employees
are dispatched>>

Hamatonbetsu-cho
Koshimizu-cho

Samegawa-mura
Hoki-cho

Tsumagoi-muraMisato-machi

Fukuyama-shi

Yunomae-machi

Hirono-machi
Kasama-shi
Tsuru-shi

Nachikatsuura-cho
Naruto-shi
Kawasaki-machi

 “Parent-child Fun and Exercise”
Misato-machi, Kodama-gun,
Saitama “Tsumagoi Wellness Challenge”
Tsumagoi-mura, Agatsuma-gun,
Gunma

Ozu-machi
Tsuno-cho20

Businesses for Local Communities and Municipalities
Selected as the designated administrator for Takeo-shi, Saga and Ozu-machi,
Kikuchi-gun, Kumamoto

The consortium in which our company participates will become the new designated manager forthe operation of sports parks and indoor sports facilities in Takeo-shi and Ozu-machi, and will
work to promote the health of local residents, promote sports, and revitalize the local community

 Takeo-shi Civic Gymnasium Ozu-machi General Gymnasium
21

Businesses for Local Communities and Municipalities
BEACH TOWN CORPORATION participates in projects to utilize the Takeo
Onsen Resort Village campground and other facilities

BEACH TOWN CORPORATION, a consolidated subsidiary of our company, participates in the Takeo
Onsen Resort Village Campground Utilization Project (Takeo-shi, Saga) as a project partner

 BEACHTOWN OND PARK (opened in April 2023)

22

Businesses for Local Communities and Municipalities:
Supporting Health and Productivity Management Initiatives
Signed “Partnership Agreement on Health and Productivity Management
Support in Sumida-ku” with Sumida-ku, TokyoAs part of the “Sumida Health and Productivity Management Support Project” launched in April
2023 by Sumida-ku, we will promote the health of Sumida-ku residents through mutual
cooperation with the ward as a “health and productivity management supporter”<<Examples of support>>
 Discounted admission to the following sports
clubs in Sumida-ku• Sports Club Renaissance Ryogoku• Sports Club & Spa Renaissance Hikifune 24(Left: Toshiharu Okamoto, Representative Director and President of
RENAISSANCE INC., Right: Toru Yamamoto, Mayor of Sumida-ku)

23

Capital and Business Alliance with Advantage Advisors
In November, the Company decided to raise approximately 5 billion yen from a fund serviced by
Advantage Advisors Inc.

Purpose of the Alliance

Summary of the Alliance• Necessity of building an organizationalfoundation to realize the transformation intoa health solution company• Business aspect
Accelerate growth by leveraging know-how
and networks through a business allianceagreement with Advantage Advisors*,
which has a track record of increasing thecorporate value of various companies• Necessity to develop new services that
respond to the current external
environment and various customer needs,
and to improve productivity through the useof DX• Financing needs for further businessexpansion and added value• Financial aspect
Combination of preferred stock, CBs, andshare acquisition rights to achieve prompt
recapitalization and financing while limiting
immediate dilution impact*Advantage Advisors (AA) is a member of the Advantage Partners (AP) Group, a pioneer in private equity funds in Japan, and handles investment strategies that involve acquiring shares in listed companies
and working together with management to enhance their corporate value (private investments to support the growth of listed companies)24

Capital Participation in Tokyu Sports Oasis Corporation
In March, the Company acquired a portion (40.0%) of the shares of a newly established company, which willtake over the fitness management, home fitness, sports facility management and operation, and digital
health design businesses of Tokyu Sports Oasis Inc., a subsidiary of Tokyu Land Corporation, through a
corporate divestiture (the newly established company will continue to use the trade name of Tokyu Sports
Oasis)<<Tokyu Sports Oasis Corporation>> The former Tokyu Sports Oasis, Inc. was established in1985 as a subsidiary of Tokyu Land Corporation
 Operates 32 directly managed sports clubs, including
22 in the Tokyo metropolitan area and 10 in the Kinki(Osaka metropolitan) area (as of March 31, 2023)
 In addition to fitness clubs and swimming and otherschools for children, the Company operates a home
fitness business focusing on the development and saleof home fitness products, and a digital health businessthrough apps such as “WEBGYM” and “weltag”

TOKYU LANDCORPORATION

60.0%

RENAISSANCE
INCORPORATED

40.0%

Tokyu Sports Oasis Corporation25

4. Store Openings and Closings During
Fiscal Year Ended March 31, 2023

26

New Store Openings and Entrusted Management New store openings
Opening date

Facility name

AddressType

Yokohama-shi, Kanagawa

Nursing and rehabilitation (directly
managed)May 2022

Renaissance Care Station Totsuka

May 2022

Renaissance Genki Gym Oizumi Gakuen

Nerima-ku, Tokyo

Nursing and rehabilitation (FC)May 2022

ATHLETA ATHLETIC CLUB

Sumida-ku, Tokyo

Outdoor fitness (entrusted
management)

June 2022

BEACHTOWN HIBIYA PARK

Chiyoda-ku, Tokyo

Outdoor fitness (directly managed)

July 2022

Renaissance Genki Gym Iwaki Chuodai

Iwaki-shi, Fukushima

Nursing and rehabilitation (FC)

August 2022

Sports Club Renaissance Aeon Town Fujimino 24

Fujimino-shi, Saitama

Sports club

August 2022

Sports Club Renaissance Ebina Vina Gardens 24

Ebina-shi, Kanagawa

Sports club

September 2022

Renaissance Genki Gym Kagoshima-Chuo

Kagoshima-shi, Kagoshima

Nursing and rehabilitation (FC)November 2022

Sports Club Renaissance Maita 24

Yokohama-shi, Kanagawa

Sports club

December 2022

Renaissance Rehabilitation Center Maita

Yokohama-shi, Kanagawa

Nursing and rehabilitation (directly
managed)December 2022

Renaissance Rehabilitation Station Maita

Yokohama-shi, Kanagawa

Nursing and rehabilitation (directly
managed)February 2023

Renaissance Genki Gym Jr. Maita

Yokohama-shi, Kanagawa

Nursing and rehabilitation (directly
managed)March 2023

Renaissance Genki Gym Obihiro Jiyugaoka

Obihiro-shi, Hokkaido

Nursing and rehabilitation (FC)27

Store Closings and Termination of Entrusted
Management
 Store closings and termination of entrusted management
Closing/termination
date

Facility name

Address

Type

Toshima-ku, Tokyo

StudioStudioEnd of June 2022

Demi Renaissance Live Stream Studio
Ikebukuro East Entrance

End of June 2022

Fitness Studio Renaissance Gotanda

Shinagawa-ku,
Tokyo

End of July 2022

Community Park KOBE

Kobe-shi, Hyogo

End of August 2022

Sports Club Renaissance Ebina

End of September
2022

Liv Shin-Yurigaoka Futsal ClubEnd of January 2023

Outdoor Fitness Okayama

End of March 2023

Outdoor fitness (directly
managed)Sports club (entrusted
management)

Ebina-shi,
Kanagawa
Kawasaki-shi,
Kanagawa
Okayama-shi,
Okayama

Outdoor fitness(entrusted management)

Sports Club Renaissance Shin-Urayasu

Urayasu-shi, Chiba

Sports club

End of March 2023

Renaissance Genki Gym Ekoda

Nerima-ku, Tokyo

End of March 2023

Sharp Fukuyama Sports Center

Fukuyama-shi,
Hiroshima

Nursing andrehabilitation (FC)
Other (entrusted
management)

Other (entrusted
management)28

Number of Facilities (as of March 31, 2023)
Group total of

190 facilities

Hokkaido

Number of
facilities: 4

Domestic

March 31, 2023

Sports club facilities
Entrusted management facilities
Total sports club facilities
RenaissanceTotal studio facilities
Rehabilitation facilities (FC)Total rehabilitation facilities
Outdoor fitness facilities
Entrusted management facilities
Total outdoor fitness facilities

105
23
128
2
32
11
43
6
9
15

Renaissance Sports club facilities
Vietnam
Total sports club facilities

22

Subtotal

2

Rehabilitation facilities (directly managed)

BEACH
TOWN
Overseas

Subtotal 188

Total 190

TohokuNumber of
facilities: 18

Chubu/
Hokuriku

Chugoku/
Shikoku

Number of
facilities: 9

Number of
facilities: 16

Kanto

Number of
facilities: 106
Kinki

Vietnam2 overseas
facilities

Kyushu/Okinawa

Number of
facilities: 15

Number of
facilities: 20

188 domestic facilities295. Outlook for Fiscal YearEnding March 31, 202430

Performance Impact Assumptions for Fiscal YearEnding March 31, 2024
Forecasts for the fiscal year ending March 31, 2024 are based on the following assumptions
External Environment

Internal Environment

 The impact of COVID-19 will be phased out. This is
expected to lead to a recovery in human flow andincrease in consumption of services
 Health-related businesses will become increasingly
active as people become more health-consciousand “want to be physically active” and “improvetheir immunity”
 Competition in the fitness industry is expected tointensify due to the development of various types ofbusinesses and industry restructuring after the
pandemic
 Steep rise in resource prices and rise in price ofgoods expected to continue for a certain period oftime
Many companies continue to consider wage
increases in order to return benefits to employees
and secure human resources Fiscal 2023 is positioned as the first year to chart a
medium- to long-term growth trajectory for fiscal
2024 and beyond
 Plan to open four new integrated sports clubs in the
sports club business
Projected opening costs are at about the samelevel as in fiscal 2022
 Aiming to become a leading company in the healthbusiness, implement organizational revisions toachieve a different kind of growth Focus on investment in human resources as astarting point to realize the corporate philosophy.
Plan to re-strengthen recruitment and cultivate
human resources, raise salary levels
31Key Initiatives - Organizational and
Human Resource Initiatives
Structural changes for new growth

Newly established the “Marketing Promotion Department” torespond to the ever-changing external environment
Assume a cross-organizational role in the organization to
optimize from a company-wide perspective, and createsynergies between businesses

Reinforce investment in human resources

Reinforce investment in human resources, including in-house
health and productivity management practices and cultivation
leading to human resource development for employees, who
are the starting point for realizing our corporate philosophy of“creating purpose in life” (ikigai in Japanese)

Under direct controlof the President

Administrative
Department

Healthcare
Business
Department

Sports club
Business
Department

 Plan to raise salaries in consideration of securing humanresources that will generate the source of business as well as
rising prices, etc.

Marketing Promotion Department

32

Key Initiatives - Sports Club Business
Re-engineering service design leading tocustomers’ emotional satisfaction

Proposal of conceptual images of use tailored tocustomer needs

 Aiming to establish services unique to Renaissanceby combining the pursuit of customers’ emotional
satisfaction generated from contact between
customers and staff with the value created bycontact via digital means Develop proposals in line with customer needs,
utilizing a wide variety of offerings such as gyms,
swimming pools, schools, saunas, and baths, etc. andwork to increase the number of members

Improved operational efficiency and added value Improved operational efficiency through automation,
labor saving, and consolidation of operations basedon standardization of store operations
Simultaneously, focus on human resource
development that will lead to increased added value
by staff In addition, some membership fees are scheduled tobe revised from July 2023 to cope with various cost
increases and to continuously improve quality
33

Key Initiatives - Nursing Care and Nursing/Medical Care,B2B Business, B2G Business
Establish a new model to accelerate thedevelopment of “Genki Gym”

New services for behavior change andhabituation in health promotion

 Developing a new store model for “Genki Gym” thatincorporates remote treatment of users byphysiotherapists using images, with the aim of
expanding to a wider audience Focusing on providing new solutions that continuously
support employee health behaviors in a company thatengages in health and productivity management, andcontribute to improving corporate productivity

Collaboration with local municipalities and support forcommunity development with a focus on health Sports clubs collaborate with local municipalities topromote community revitalization by offering nursing
care prevention classes, taking on the responsibility ofswimming lessons and club activities at schools, andsupporting community development centered on healthin rural areas.
34

Key Initiatives: Creating Value through Alliances
Accelerate growth through alliance with
Advantage Advisors

Create synergy with Tokyu Sports Oasis

 Promote multiple projects with Advantage
Advisors, with whom we have a capital andbusiness alliance, to improve our profitability andcreate added value with an eye to the future Work with Tokyu Sports Oasis, which we haveinvested in, to help more people solve healthissues by leveraging each other’s strengths
and know-how<<Example of project>>Store development suitable forvarious needs
Consideration of businesssuccession and M&A

Solving health issues for more
peopleRenaissanceTokyu Sports
Oasis

Building a partnership that leverages thestrengths of both companies

35

New Store Openings and Entrusted Management
Scheduled for April 2023 and Beyond
 Scheduled to be newly opened
Opening date

Facility name

AddressType

April 2023

Takeo Civic Baseball Stadium (and 26 other facilities)

Takeo-shi, Saga

Designated management

April 2023

Five Ozu-machi athletic park facilities (and eight others)Ozu-machi, Kumamoto

Designated management

April 2023

BEACHTOWN OND PARK

Takeo-shi, Saga

Outdoor fitness (entrusted management)

July 2023

Sports Club & Spa Renaissance Imazato 24

Osaka-shi, Osaka

Sports club

July 2023

Sports Club Renaissance Sendai Oroshi-machi 24

Sendai-shi, Miyagi

Sports club

Autumn 2023

Sports Club & Spa Renaissance Hikarinomori 24 (tentative name)

Kikuyo-machi, Kumamoto

Sports club

Autumn 2023

Sports Club Renaissance Aeon Mall Zama 24 (tentative name)Zama-shi, Kanagawa

Sports club Sports Club & Spa RenaissanceImazato 24

 Sports Club RenaissanceSendai Oroshi-machi 2436

Forecast of Consolidated Results andDividends for Fiscal Year Ending March 2024
Steady recovery of net sales to pre-COVID levels and improvement in profits at each stage
from fiscal 2022 are expected(Millions of yen)
Fiscal Year Ended Fiscal Year Ending
March 31, 2023
March 31, 2024
(Actual)(Forecast)

40,76044,000Operating income

680

900

Ordinary income

311

350

Net income attributable toowners of the parent company(1,141)

100

Net income per share (yen)(60.44)

5.29

8.0

8.0

Net sales

Dividend per share (yen)Operating income to net sales(Interim 4.0/Fiscal year end 4.0) (Interim 3.0/Fiscal year end 5.0)

1.7%

2.0%

Year-on-Year
Increase/decrease+7.9%+3,239+32.3%+219+12.4%+38+1,24137

6. Medium- to Long-Term Direction

38

A Look Back - Three Turbulent Years for the
Fitness Industry
FY2019FY2020

FY2021

FY2022●Outbreak of COVID-19 in Japan●Reputational damage caused by cluster announcements●Request for closure due to declaration of state of emergency●Increase in the number of members freezing or cancelling their membership due totemporary closures●Fitness companies suffer financial setbacks, some become insolvent●Begin to see industry restructuring●Polarized performance trends within
the industry
39

Growing Health Needs and Creation of New Services
Growing health needs
•
•
•
•
•

Secondary health hazards due to lifestyle changes caused by the
pandemicDecrease in physical activity due to restricted outings
Frailty among the elderly in particular has become a social problem
Increase in mental health problems due to remote work
Reaffirmation of the importance of maintaining and managing health...And others

Creation of new services
•
•
•
•
•

Providing new exercise opportunities through online fitness
Increase in the opening of new stores in various new businesscategories
Development of original products and e-commerce are booming
Propose personalized services using digital technology
New products with reference to various schools and communities...And others

40What our company gained through the pandemic[Capital enhancement][Fitness schooling][Strengthening digital contacts]• Quickly enhance capital to prepare fordeteriorating business performance(SOMPO Holdings, Inc. and SUMITOMO
LIFE INSURANCE COMPANY)• Secure new growth capital for the future(Advantage Advisors)• Succeeded to implemented school
elements into fitness following the rapid
recovery of school members and introduced
it to all clubs, achieving a vertical start-up.
• Utilize small groups and gradual lessons,allowing participants to experience bothresults and connections simultaneously, andfostering ongoing engagement.

• Enhancing customer value by integrating
digital contact points with real contact
points to provide services• Online lessons, EC, app community sites,etc.
• Revise prices while increasing added
value[Deepening business to date][Collaboration with industry peers][Speed of response to change]• Launch and accelerate initiatives for
projects to penetrate deeper into thecorporate and local municipal sectors• Online and business development-type
study abroad programs, etc.

• Accelerate efforts to collaborate with othercompanies in the industry to overcome thechallenging environment caused by the
pandemic• By forming a capital alliance with Tokyu
Sports Oasis, expecting to become theindustry's No. 1 sales scale as a corporate
alliance• Respond flexibly and quickly topartnerships and alliances with othercompanies to generate results• Decision-making to respond to change
without being limited by past experience41

Long-Term Vision
Health solution company that enriches the age ofthe 100-year life span

42

Our Key Social Challenges and Growth Opportunities
Social changes and major social issues

Our view of growth opportunities

Revealing
healthissuesDue to changes in the social context, healthconcerns and lifestyle-related diseases are
increasing in all generations, and social security
costs are also going up

Realization of a society in which all generations
can live healthy and comfortable lives throughenjoyable physical activity

Discrepancy
between average
life expectancy
and healthy life
expectancy

Although life expectancy is among the highest in
the world, healthy life expectancy is about nine
years shorter for men and about 12 years shorter
for women, leaving many people with healthconcerns and anxieties

Achieving a “healthy and long-lived society” fullof health and vitality through exercise andinteraction with others

Lack ofrehabilitationand otherservices

While the number of people who need assistanceto live independently is increasing, the supply of
personalized services (solutions) is lacking

Realization of a society in which everyone, eventhose with illnesses or those who need support
such as nursing care, can live a life and lead alife that is uniquely their own

Decline oflocal
communities

Due to the increasing number of people living
alone or in nuclear families, there are fewer
opportunities to participate in the community andmore people with physical and mental issues

Building a community around “health”
Realization of local communities where people can live actively

We will contribute to solving social issues as a “health solution company that enriches the age ofthe 100-year life span”

43Business Growth Through Collaboration Among Our Company’s
Business Domains
Expanding our business domain by linking the various types of know-how acquired through sports club management toother markets
We will continue to combine our expertise in social issues related to health to solve these issues and achieve growth

Our Business Domain and Future Prospects
Customer contact

Store-based services

Non-store-based services

Business domain

Current focus areas
Fitness/
schooldomainIncrease added value andexpand business in thefitness/school domain

Medium- to long-term focus areas
Healthcarerelated
domainStrengthen resources forhealthcare-related domain

New business challenges[Healthcare-related domain already addressedby our Company] Nursing care and nursing/medical care
 Health promotion business for companies
and health insurance associations
 Health promotion business for local
communities and municipalities

44

Future Outlook for Sports Clubs

45

Enrollment at Sports Clubs on the Rebound
Trends in Sports Club Enrollment
450,000

400,000

350,000

300,000

6.7%
increase
250,000

2019/32020/3* Excluding online members

2021/32022/32023/3

6.1%
increase
expected

2024/32025/32026/32027/32028/3(Forecast) (Forecast) (Forecast) (Forecast) (Forecast)46

Enrollment in Sports Clubs Expected to Be at All-timeHigh by End of Fiscal 2026
Trends in Sports Club Enrollment
450,000

400,000

350,000

Estimated at 5%
annual increase

300,000

6.7%
increase
250,000

2019/32020/3* Excluding online members

2021/32022/32023/3

6.1%
increase
expected

2024/32025/32026/32027/32028/3(Forecast) (Forecast) (Forecast) (Forecast) (Forecast)47

Creating New Added Value for Integrated Sports Clubs• Continued to open new stores
during the pandemic
Continue to open new stores andstrengthen business succession• Shift from a cost-cutting mode in the wake of the pandemic toward charging higher
fees through new value offerings (the revision of membership fees scheduled forJuly is part of this shift)• Reinforce marketing to increase customer satisfaction through[human × digitalization]• Expansion of health care domain in sports clubs

48

Fundamental Review of Integrated Sports ClubManagement• Address high utility costs• Streamline non-customer contact operations by centralizing and automating
operational methods• Improve the club portfolio by making management decisions (closing clubs)
as necessary for low-profit clubs• Invest in human resources to support human capital management• Together with “Tokyu Sports Oasis,” which we have invested in, we will
implement management that capitalizes on the strengths of both companies
49

Future Outlook for
Nursing care and nursing/medical care,
Health promotion business for companies andhealth insurance associations, andHealth promotion business for local communities
and municipalities
50

Nursing Care and Nursing/Medical Care
• In response to the health issues of the elderly population,
which is expected to increase until 2042, we will accelerate
the opening of “Genki Gym” daycare services specializing
in rehabilitation, which is a growing need in the area oflong-term care insurance• In fiscal 2023, we will promote minor changes toaccelerate store openings, and from fiscal 2024 onward,
we will open four to five new directly managed stores(including home-nursing stations) and eight to 10 franchise
stores each year
• In addition, the company began researching a new
business model that includes not only day-care facilities
but also residential care facilities
51

Nursing Care and Nursing/Medical Care
• Accelerate the development of“SYNAPSOLOGY®,” an original method forpreventing cognitive decline, by building a new
business model based on the results ofrepeated verification of its effectiveness andpublication of papers• The know-how of the “Renaissance Exercise
Support Center,” developed in cooperation with
the Osaka International Cancer Institute, canappeal to a wide range of cancer survivors, andwe will collaborate with life insurancecompanies and others to promote its
deployment online and at Renaissancefacilities, etc.
52

Health Promotion Business for Companies and Health
Insurance Associations• Our company has promoted the operation of various organizations such as the“Kenkokeiei (Health and Productivity Management) Meeting.” The company isplaying a role in supporting the government promote “health and productivity
management,” and is using the knowledge it has gained to accelerate healthpromotion for employees and members of companies and health insurance
associations• Continue to promote health through sports clubs• Launched a new online product service (product name:“Smart Action”) to help employees and association
members change their behavior and develop habits• ROL (RENAISSANCE Online Livestream), which is usedby many SUMITOMO LIFE’s “Vitality” subscribers,
is expanding its membership by enhancing the search forpartner companies
53

Health Promotion Business for Local Communities andMunicipalities• Based on our track record of having been
entrusted with 200 or more municipal projects, weare expanding our business not only to themunicipalities where our sports clubs are located,but also to municipalities throughout Japan• To address issues faced by schools (increased
pool maintenance and management costs,
teachers' burden related to classes, etc.), we are
expanding the number of swimming classes
offered at elementary, junior high, and highschools by leveraging our facilities and swimming
instruction capabilities cultivated through oursports clubs
54

Health Promotion Business for Local Communities andMunicipalities• Utilizing know-how accumulated through community
development projects in Tanagura-machi (Fukushima), Hokicho (Tottori), and Koshimizu-cho (Hokkaido), we arepromoting “healthy community development” proposals interms of both hardware (tangible items) and software(intangible items), mainly for municipalities in underpopulated
areas• Expand PPP projects utilizing municipal resources, such as
the designated management of Ohama Gymnasium in Sakaishi and sports parks and indoor sports facilities in Takeo-shi,
which were acquired through PFI, in cooperation with its
subsidiary, BEACH TOWN

55

Achieving Medium- to Long-Term Growth
Aim to achieve record profits over the next five years by “creating purpose in life
(ikigai in Japanese) ” and making social contributions to living healthy[FY2029] 50th anniversary of establishment
Contribute to a Well-Being society as a health solutions
company[FY2027]
Aim to achieve record-high operating income of over 4 billion yen[FY2025] [FY2026]
Resume sports club openings and allocate management resources according
to new scenarios[FY2024]
Redefine the existence value of integrated sports clubs and increase thecontribution of healthcare-related businesses to the company’s performance[FY2023]
Reinvest funds from sports club price revision into future growth areas,
preparing for return to profitability
Identify social issues to be addressed by our company[FY2022]
Reversal of deferred tax assets recorded as extraordinary losses in
response to changes in the business environment of the sports clubbusiness

56

Net Sales Composition Ratio Targeted for FY2027
Net Sales Composition Ratio
Targeted for FY2027
Net Sales Composition
Ratio in FY2022

Sports club (fitness/school)
Health care business under collaboration with sports clubs
Healthcare-related businessSports club (fitness/school)
Health care business under collaboration with sports clubs
Healthcare-related business57

Toward the Realization of a Health Solution Company
Aim to achieve record-high operating income of over 4 billion yen by
fiscal 2027

• Net sales are expected to be 60 billion yen in fiscal 2027 (not including M&A)
*The contribution of healthcare-related businesses to the Company’s overall performance will
increase from fiscal 2024 onward(Millions of yen)

60,000Net sales (forecast) image(Millions of yen)

Operating income (forecast) image

4,000
50,0003,000

40,0002,000

30,0000
20,0001,000

FY2022FY2023FY2024FY2025FY2026FY2027

0

FY2022 FY2023 FY2024 FY2025 FY2026 FY2027

58

Promotion OF M&A

59

Promotion of M&A

Promote M&A to become a “health solution company”[M&A in the sports club business][M&A in healthcare-related business areas] Restructuring in the fitness industry is gaining
momentum Reinforce initiatives, including facility
succession, based on experience of 18 M&Atransactions in the past

 Identify “health-related social issues” to beaddressed by the Company, andconcretization of a growth business story
through initiatives taken in fiscal 2023
 Also consider the scope of healthcare-related
businesses

Leverage funds from Advantage Advisors, etc.
60

We at Renaissance will continue to propose healthy andcomfortable lifestyles to our customers as a “company
for creating purpose in life (ikigai in Japanese) ”

RENAISSANCE INCORPORATED
Corporate Planning Devision[Address] 2-10-14 Ryogoku, Sumida-ku, Tokyo[E-mail] ml_pr@s-renaissance.co.jp[URL] https://www.s-renaissance.co.jp/
This presentation material contains projections based on future assumptions, outlooks and plans as of May 10, 2023.
Actual results may differ from these forecasts due to risks and uncertainties associated with the global economy,competitive conditions, currency fluctuations, and other factors.

61

Reference Information

62

Trends in Existing Clubs
 Net sales

 Fee per membership (cumulative total for full year)(Millions of yen)

(Yen)

40,0008,841

10,00050,000+7.6％+22.6.%

8,000

30,0006,000

20,0004,000

10,000

2,000

0

0

FY2020

FY2021

FY2022

 Number of members at end of period(Members)
400,000

6,609*Including those who have put theirmembership on freeze*Including temporary closing periods
FY2020

FY2021

FY2022

 Withdrawal rate (cumulative total for full year)
5.0%

＋3.6％

(3.8％)

9,170

4.0%

300,000

3.8%
3.1%

3.2%

FY2021

FY20223.0%
200,000

2.0%

100,000
0

1.0%

FY2020

FY2021

FY20220.0%

FY202063

Membership Age Breakdown
Fitness division0%

School division

20%

40%

60%

80%

0%

100%

50%

100%

March
2019

15.0

13.8

19.8

20.5

16.8

14.2

March
2019

58.3

19.3

4.2 18.2

March
2020

14.0

13.3

19.5

20.8

16.9

15.5

March
2020

58.6

19.0

4.0 18.4

March
2021

12.8 12.0

18.2

March
2021

58.1

19.4

3.9 18.6

March
2022
March
2023

18.3

21.0

17.7

50 or over: 57.2%

13.3 11.8

17.7

21.1

17.4

18.7

50 or over: 56.2%

14.2

Under 20’s

12.5

17.1

20.9

30’s

40’s

50’s

17.1
60’s

18.2
70’s or over

March
2022
March
2023
Under 10

Under 20: 74.0%

55.7

18.3

4.5

18.2

4.9 21.9

21.5

Under 20: 73.2%

55.0
Ages 10 to 19

Ages 20 to 39

40’s or over

School membership: Swimming, tennis, otherschools (golf, soccer, fitness school, etc.)64