FY03/2016

Briefing session on the financial results

SATO RESTAURANT SYSTEMS CO., LTD.
Listed on TSE 1st section: 8163

H20160512-1

Table of Contents
FY03/2016 Actual Performance

Nigiri Chojiro

Highlights

4

About Nigiri Chojiro

15

Nigiri Chojiro Basic information

31

Newly opening / Renovation5

About FOODSNET Corp.

17

Attractiveness32

Current situation: Progress in various measures

6

Did you know?

22

Synergies

33

Profit & Loss sheet (PL)7

Unconventional player of Sushi-go-round24

Features34

Details of major items of SG&A expenses

8

Sushi industry: What is gourmet Sushi-go-round?

25

Strength39

Analysis of increase/decrease in labor costs

9

Market trend of Sushi-go-round26

Positioning

40

Aiming at becoming No.1 company in working
environment in the food-service trade

10

Gourmet Sushi-go-round rankings

27

Strategies

41

Ranking in Kansai area

28

42

11

Omotenashi Dojo (hospitality training)

Balance Sheet (BS)History of Nigiri Chojiro

29

43

12

Menus

Cash Flow Statement

Areas / number of restaurants

30

Support for inbound tourists

47

Performance transition of existing Washoku Sato
restaurants

13

Nigiri Chujiro

50

Mid-term management plan and approaches for the next term, etc.
Towards realization of "Sato Pyramid"

53

Mid-term management plan

56

SRS group restaurants composition (current)

54

Measures & Planned opening new restaurants for the next term

58

SRS group restaurants composition (near-future)

55

Performance forecasts

59

Topics60

FY03/2016
Overview of the ﬁnancial results

3

Highlights
１ Higher ↑ Net sales:40,061 million yen up 5.5% increase by 2,091 million yen
revenues(YOY)

Increase in number of restaurants in operation and solid growth of sales of existing restaurants.

Operating income : 542 million yen down 54.2%↓
profit２ LowerOrdinary income : 361 million yen down 72.8%

decrease by 641 million yen(YOY)decrease by 969 million yen(YOY)
Due to, in addition to the payment of unpaid wages for overtime working for the preceding two years, such asincrease in labor cost because of raised hourly wages for part-time employees, increase in expenses associatedwith opening new restaurants, and occurrence of foreign exchange losses.

３ Newly

opened23 restaurants 【Washoku Sato】DM: 3【Nigiri Chujiro】DM: 3【Santen】DM: 10【Nigiri Chojiro】DM: 1【Katsuya】DM: 3 FC: 3 DM: directly-managed
FC: franchise chain

NOTE: In addition, contracts have been executed for opening 18 new restaurants .
(as of Mar. 31, 2016)

Group total (domestic & overseas): 348 restaurants
DM restaurants: total 311
・Washoku Sato
２０１・Sushi-han
１４・Santen
２２
・Nigiri Chojiro (including CHOJIRO) ５３
・Miyakobito
１・Nigiri Chujiro
６・Katsuya
１４Group FC restaurants: total 31
・Miyakobito
・Katsuya

１７
１４Overseas: total 6
・Taiwan・Indonesia
・Thailand

１
２
３

4

Newly opening / Renovation
FY03/2016
Planned46

Newly opened
２３

restaurants
Newly	
  opened
Total
Washoku Sato
Sushi-hanSantenSanten (FC)Nigiri Chojiro
Nigiri Chujiro
Katsuya
Katsuya (FC)
Renova)on
Total
Washoku Sato
Nigiri Chojiro

Contracted
＋
１８
＝

Total
４１

89.1% achieved

PlannedActualContracted*

Total

Achieved

46

23

18

41

89.1%

3
0
16
4
4
3
6
10

3
0
10
0
1
3
3
3

2
0
7
0
2
0
3
4

5
0
17
0
3
3
6
7

166.7%
106.2%
0%
75.0%
100.0%
100.0%
70.0%

PlannedActualAchieved

1011110.0%

64

6
5

100.0%
125.0%*	  Contracted:	
  Number	
  of	
  contracts	
  executed	
  to	
  open	  new	  restaurants	
  as	
  
of	
  Mar.	
  31

5

Current progress in various measures
Measures

Actual progress (as of Mar. 31, 2016)

1

Improved purchasing power and further
streamlining by using foodstuff sharedwith FOODSNET Corp.

So far about 20% of foodstuff has been shared
among FOODSNET Corp. and SRS restaurants(Washoku Sato, Santen and Sushi-han).

2

Full-blown operation of staff attendance
management system using veinauthentication terminals.

The system has been adopted at every restaurant
since Apr. 1, 2015, with salaries calculated onminute-by-minute basis.

3

Outsourcing payroll-related operations,
including those in response to theadministrative My Number system.

Payroll-related operations have been outsourced
since Oct., 2015; and as for the My Number system,
collection/storage/administration systems are inplace according to the governmental guidelines.

4

Updating the core system to start testing
operation aiming for adoption in
FY03/2017.

Testing operation was finished and the new system
has been in operation since Apr., 2016.

5

FC development of Santen restaurants

6

Carrying on experiment and store
development of "Delivery Sushi - Nigiri
Chujiro"7

Enhancing promotion activities making use New CMs featuring popular talents have beenof popular talents, official mascot
broadcasted since Oct., 2015. There are currently
600,000 members of LINE@ accounts.
characters and SNS.

8

Opening new restaurants more widely
overseas

FC contract has been executed with one company
and the first FC restaurant will be opened during
FY03/2017.
2 units comprised of 6 stores are already opened in
Kyoto City; and experiments are still underway inorder to organize and resolve various issues for the
next stage.

In Taiwan, joint venture with President Chain Store
Corp. was dissolved, which became one of SRS's
wholly-owned subsidiary and continues its businessat Danshui branch. In Thailand, the third restaurant,"Sriracha AEON branch" was opened in Oct.

6

FY03/2016 Actual performance▶

Proﬁt & Loss sheet

Higher revenues but lower profit
Higher revenues
Lower profit

Increase in net sales (+ 2 billion yen) and gross proﬁt (+ 1.2 billion yen)
Lower proﬁt due to signiﬁcant increase in SG&A expenses by 1.85 billion yen(million	
  yen)(▲ means negative)

FY03/2015
AmountFY03/2016

Ratio to sales

AmountRatio to sales +/- (amount)+/- (%)Net sales

37,969100.0%

40,061100.0%

2,091

5.5%

Cost of sales

12,97934.2%

13,864

34.6%

884

6.8%

Gross profit

24,98965.8%

26,197

65.4%

1,207

4.8%

Selling, general andadministrative expenses

23,80662.7%

25,655

64.0%

1,848

7.8%

Operating income

1,183

3.1%

542

1.4%

Ordinary income

1,330

3.5%

361

0.9%

Net income attributable toowners of parent

840

2.2%

6

0.0%

※1

-641 -54.2%※2※1 Expenses on opening new restaurants and increase in labor cost.
Number of employees: 863 (previous) → 921 (current)※2 Non-operating income/loss(foreign exchange gains of 221 million yen (previous) → foreign exchange loss of 66 million yen (current))

968 72,8%-834 -99.3%

7

Details of major items of SG&A expenses(million	
  yen)(▲ means negative)

2015.3

Labor cost2016.3

diﬀerence

major factors

Payment of unpaid wage (+460), newly
opened restaurants (+340), increased
hourly wages (+100), other labor costs at+1,348
restaurants (+210), head oﬃce (+160)
and subsidiaries (+270), and decreased
bonuses due to account closing (▲200)

12,882

14,231

Promotion expenses

358

475

+118 Increase in discounted cost

Commission fee

469

583

+114

Rents

3,926

4,035

+109 for newly opened restaurants

Supplies expenses

1,035

1,130

+95 for newly opened restaurants

223

270

1,314

1,361

296

338

1,812

1,678

Taxes and dues
Depreciation
Advertising expenses
Utilities expenses

Commissioning cash collection at restaurants
on site and store contracts management, etc.

+47 Increase in pro forma standard taxation+46 for newly opened restaurants+42 TVCM and others▲ 134
8Analysis of increase/decrease in labor costs(▲ means negative)

Analysis of increase/decrease in labor costs(billion yen)

+0.27 ▲0.2decreased bonuses
+0.21
+0.34
+0.46

+0.16

due to account closing
subsidiaries

head oﬃce+0.1

labor costs at existing restaurants(due to increased revenues, etc.)
hourly wages
FY03/2017
for part-time employees

for newly opened restaurants

14.23

FY03/2016

payment of unpaid wages

12.88
9

Aiming at becoming No.1 company in working environment
in the food-service trade
To prevent recurrence of unpaid wages for overtime working and reduce excessive work
The Company has always put its eﬀorts into arrangement/improvement of workplace environment, and struggled with
continuous improvement of working environment for employees, including adoption of one week consecutive leave scheme, full
ﬁve-day workweek, and intensive encouragement of taking 100% vacations. Moreover, various measures have been carried out
about 300 part-time employees were promoted to regular employees in October 2014 to expand opportunities especially forfemale staﬀ to play their active roles further, and in April 2015 staﬀ attendance management system using vein authentication
terminals was introduced enabling salaries calculation on minute-by-minute basis.
With respect to overtime working, the Company had previously paid salaries based on employees' declarations, but it arrived
at recognition that declarations of overtime working were not made correctly. For this reason, a fact-ﬁnding commission wasestablished in cooperation with external attorney and others to investigate the matter and as a result, quite regrettable to say, it
found to an extent that some of actual working was not recorded in fact on the staﬀ attendance management system. The
Company therefore came with the conclusion that it should immediately pay unpaid wages for overtime working for thepreceding two years and decided to pay total amount of 462 million yen.
For the future, the Company will, not only settling the past, but also make its best to ensure that measures are taken intensively
to prevent recurrence so that unpaid wages for overtime working could be eliminated.

Measures for preventing recurrence
Correct entry of working time into the staﬀ attendance management system (guided & ensured)
Establishing "HELPLINE" as an external consultation desk
Shorter business hours (e.g., earlier closing, temporary closing during idle hours)
Allocating more budget to operational hours
Providing guidance and training to supervisory staﬀ
Building up support framework within areas and divisions
Reconsidering elements of restaurant operations (e.g., time of inventory counting)10Balance Sheet (BS)Public stock oﬀering (Jun., 2015)
Equity ratio: 42.5％ → 51.8％ Greater ﬁnancial strength(▲ means negative)(million	
  yen)End of FY03/2015

End of FY03/2016(Mar. 31, 2015)(Mar. 31, 2016)+/-

Total current assets

7,526

10,765

3,239

Total non-current assets

16,742

17,053311

24,272

27,8203,548

Total current liabilities

7,284

7,352

67

Total non-current liabilities

6,530

5,936

▲594

Total liabilities

13,815

13,289▲526

Total shareholders’ equity

10,707

14,915

4,207

10,456

14,532

4,074

24,272

27,8203,548

Total assets

Total net assets
Total liabilities and net assets

11Cash Flow Statement
4.3 billion yen raised by public stock oﬀering (Jun., 2015)
CF from ﬁnancial activities signiﬁcantly increased(million	
  yen)（▲ means negative）

FY03/2015

FY03/20162014.4.1〜2015.3.31

2015.4.1〜2016.3.31+/- (amount)

CF from operating activities

2,721

1,261

1,459

CF from investments-1,220-1,579-359

CF from financial activities-1,597

3,246

4,844

Balance of cash
and cash equivalents at the end of the period

5,532

8,616

3,084

12

Performance transition of existing Washoku Sato restaurants＜before adjustment according to public holidays＞
％

１Q

110

２Q

３Q

４Q

Net	
  sales
Average	  spending

105

100

Number	  of	
  customers
95

90

さと

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

13

Performance transition of existing Washoku Sato restaurants＜after adjustment according to public holidays＞
Sales slowed down due to decline in average spending
％

１Q

２Q

３Q

４Q

110

105

Average	  spendingNet	
  sales100

Number	  of	
  customers
95

90

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

＜Overview of Washoku Sato＞
During the first half, sales of "Sato-Shabu" contributed to much higher average spending that raised net sales.
On the other hand, number of customers was less than the previous year mainly during lunch time.
During the second half, lunch menus were refreshed resulting in recovery trend of number of customers;
however, sales during dinner time could not grow well and average spending was also lower than the previous
year, that led to lower net sales as compared to the previous year.

14About Nigiri Chojiro

15

16

FOODSNET Corp.
that operates Nigiri ChojiroAug., 1974: Established in Kyoto.
1975: Opened its 1st Sushi-go-round restaurant.
Expanded newly opening of DM/FC "Atom Boy" Sushi-go-round restaurants (from the era of rise of Sushigo-round until late 90's).
At the same time, expanded "Miyakobito" shops of takeout Sushi (delivery as well) mainly as FC style.
Large scale Sushi-go-round chains emerged and "Atom Boy" lost its competitiveness.
2001: Opened the 1st "Nigiri Chojiro" restaurant and subsequently continued opening new ones steadily
mainly in Kansai area.(currently 53 restaurants in operation)
For several years after Lehman's collapse, existing restaurants/shops experienced weak sales due todeﬂation.
Jul., 2013: Became one of SATO RESTAURANT SYSTEMS's wholly-owned subsidiaries.
Since then, until Mar., 2016, existing restaurants/shops have achieved higher sales YoY.

FOODSNET Corp.

Specialized in delivery

Gourmet Sushi-go-roundTakeout & delivery

17Did	  you	
  know?

No.1 Customer Satisfaction
Sushi-go-round sector in Kansai area
2015 Oricon Japan
Customer Satisfaction Ranking: Food Service

Sushi-go-roundNo.1 in Kansai area

22

Did	
  you	
  know?

Also popular among foreigners!
tripadvisor.jp
Ranking of the most popular restaurants
among foreigners

CHOJIRO Shijo-Kiyamachi branch (Kyoto pref.)2014: 15th place (nationwide)
2015: 20th place (nationwide)＜CHOJIRO Shijo-Kiyamachi branch＞

23

Koagari table*

Nigiri Chojiro
provides outside-the-box Sushi-go-roundLane* "Koagari" table is a kind of Japanese style,partly separated compartment as shown in the photograph.

Sushi-­‐go-­‐round
Koagari tables are provided,
not along the lane.

Counter seats and/or tables areprovided, all of which are along the lane.

Wide variety of alcoholic beverages

Conventional Sushi-go-round oﬀers

and side dishes are oﬀered,mainly Sushi and has much fewer

just like Izakaya (Japanese-style pub).
Even "Zashiki" (using tatami mats onvarieties of dishes other than Sushi.
No Zashiki compartment is provided

the ﬂoor) compartments

at conventional Sushi-go-round.

are provided at Nigiri Chojiro.
24Sushi industry
What is gourmet Sushi-go-round?
Average	  spending

Tachi-­‐Sushi
Tachi-­‐Sushi
convenIonal	
  Sushi	  restaurant

other	
  than	  Sushi-­‐go-­‐round3,000yenSushi-­‐go-­‐round2,000yen
Choushimaru
Gatten Sushi
Nigirinotokubei

Gourmet	  	
  Sushi-­‐go-­‐round100-­‐yen	
  	
  Sushi-­‐go-­‐roundSushiroKurasushi

Gourmet	  Sushi-­‐go-­‐round
Average spending is around 2,000 yen

Daiki Suisan
Hakodate Ichiba
Kaisen Misakiko
Nagoyakatei

Many diﬀerent prices-per-dish:100 yen ~ over 500 yen

1,000yen
Genki Sushi(Uobei)
Hamazushi
Kappazushi

Small-scale, classic and common "Sushi restaurant"
mainly consisting of counter seats, where the chef
makes and serves Sushi over the counter. Most ofthem are privately managed. Typically expensive,
sometimes prices are set at the current value.

100-yen Sushi-go-round
Average spending is around 1,000 yen

Much fewer variations
other than 100 yen items
25

Market trend of Sushi-go-round
Points(Source:	
  Fuji	
  Keizai)Sushi-go-round market(billion	
  yen)

600

market size: about 580 billion yen

Market size : about 580 billion yen
578

559

588

Growth trend: slight slowdown

500
growth slowed down slightly

Average spending: upward swing

410
400

Major 100 yen Sushi companies adopted various merchandisingmeasures such as items expansion including noodles andcoffee, high-value menus of over 100 yen (gourmet dishes); andare still leading market growth by continuous opening of newrestaurants.

300

2008

2009

2010

2011

2012

2013

2014

2015

(prospect)

Sales share

（%）

87

（%）

86.8
86.1 ⚫

8685.3 ⚫

⚫

Share by number of restaurants

57

major 15 companies

56

major 15 companies

⚫

54

⚫

56.4

14.7

⚫

14

47

others

46

⚫

45

13.9

13.2 ⚫

〜
〜
2014

2015

1,080 ⚫

1,080

1,060 ⚫

1,050⚫

others
45.7

⚫

1,040

44

43.6

43
０

2013

46.9

Average spending

1,060

〜
〜

15

（yen）

1,070

54.3

53.1 ⚫

53

〜
〜

０

2016
(projecIon)

55

85

13

Oligopoly by major chains is underway

⚫

〜
〜

1,030

1,030⚫

〜
〜
2013

2014

2015

26
2013

2014

2015

Gourmet Sushi-go-round ranking by sales amount

Rank

Name

Sales
(million yen)

Number ofrestaurants

Main area

1

Sushi Choushimaru

19,500

90

Kanto

2

Gatten Sushi, Kantaro, and others

15,500

120

Kanto

3

Nigiri Chojiro, CHOJIRO

9,725

53

Kansai4

Nigirinotokubei, Kaisen Atom, and others

8,450

61

Chubu

5

Kaisen Misakiko

7,100

63

Kanto

6

Marinepolis and others

5,400

55

Chugoku

7

Heirokusushi and others

4,600

60

Tohoku8

Hakodate Ichiba

2,800

18

Kansai9

Kaitenzushi Toriton

3,400

13

Hokkaido* Source: Fuji Keizai (prospect for 2015)27

Ranking by "Number of restaurants" in Kansai area

Nigiri Chijiro has
the Largest number of gourmet Sushi-go-round in Kansai area
Kansai area
Ranking by number of Sushi-go-round restaurants
Rank

Name

NaNumber ofrestaurantsme

Type

1

Muten-Kurazushi

127

Sushi-go-round2

Sushiro105

Sushi-go-round3

Kappazushi

52

Sushi-go-round4

Nigiri Chojiro

48

gourmet Sushi-go-round

5

Daiki Suisan

29

gourmet Sushi-go-round6

Hakodate Ichiba

21

gourmet Sushi-go-round* Source: Fuji Keizai (July, 2015)28

History
Road to the birth of gourmet Sushi-go-round, Nigiri Chojiro
operated Sushi-go-round,as well as BBQ restaurants
and Izakaya pubs

＜Sushi-­‐go-­‐round＞＜100	
  yen	
  Sushi＞

retreat＜a	
  liUle	  higher	
  value＞

concentrated on gourmet
Sushi-go-round,Nigiri Chojiro

Gourmet	  Sushi-­‐go-­‐round"Ikesu"	  (big	  aquarium)	
  provided	
  inside

Atom	
  Boy

Kaiten	  Atom	  Sushi

Kaisen	  Atom	  Boyaverage	  spending:	
  1,000	
  yen

average	  spending:	
  1,500	
  yen

tougher	  compe))on

emergence

Sushiroaverage	  spending:	
  2,300	
  yen

tougher	  compe))on

Partly-separated Koagari tables are
Absolutely keeping
a distance fromconventional
Sushi-go-roundprovided, and wider variety of side
dishes such as Tempura, fried foods
and beverages/alcohols are oﬀered.
started in 2001
currently 53 restaurants in operation

Kurazushi	  and	
  others

100-yen Sushi-go-roundswitching from Atom or others: 17
Mainly switching from other companies'
restaurants with all their furnishings

29

Areas / Number of restaurants
Dominantly in Kansai area, 53 in total are in operation
Live Fish Sushigo-round"Nigiri Chojiro"

Sushi-go-round"CHOJIRO"

Kyoto-style Sushi"Miyakobito"

Delivery Sushi"Nigiri Chujiro"

Kyoto-style Sushi"Miyakobito"（pref.）

DM

DM

DM

DM

ＦＣ

Osaka

23

1

Hyogo

8

Kyoto

9

Shiga

2

3

Nara

4

2

Wakayama

1

1
4

1

1

6

3

Mie

1

Gifu

1

Nagano

1

Tokyo

1

Saitama

2

1

Kochi
Total

1
50

3

1

6

17

30

Nigiri Chojiro
Basic information
price range

average spending

Sushi dish (2 pieces on one dish)about 2,350 yen

120 yen ~ 810 yen (w/o tax)

cost for newly openingsite area
130 ~ 530㎡
average: 230 ~ 260㎡

Kansai area

number of restaurants

No.1 gourmet Sushi-go-round53

by number of restaurants(including CHOJIRO)

annual sales

number of seats

Kanto area

180 million yen

75 on average

4 restaurants

about 100 million yen(70 million yen
in case of using existing premise)31

Attractiveness of Chojiro
from the viewpoint of SRS Group１

Enhanced presence as a Japanese food group chain in Kansai area

２

Geographically easy to integrate logistics and HQ functionalities

３

４4
５5

Price range does not compete with Washoku Sato(enabling segregation within the same market)
average spending - Washoku Sato: 1,200 yen ~ 1,300 yen; Nigiri Chojiro: about 2,350 yen

High proﬁtability of Chojiro(cost rate: 40%; operating income to sales at restaurant level: over 10%)

Achievement in opening new restaurants and room for further growth
Growth to 53 restaurants in operation during the last 15 years(including 17 of them transformed from Atom Boy)32

Synergies

Cost reduction eﬀects
１

HQ relocation of FOODSNET

Same oﬃce with SRS Group HQ; Reduction in HQ rent
Carried out in Feb., 2014
Collective purchase by the Group as a whole and２

Organizational integration
for purchasing

imported items developed by SRS→e.g. prawn for
Sushi, eel, ginger
Carried out in Mar., 2014

３

Integration of logistics

4

Using common items

Collective delivery for the entire Group
Carried out in Oct., 2014

Of all 300 items, 60 common items are used33

Features of Nigiri Chojiro

Merchandise
Chefs make Sushi using fresh/
live ﬁshes, that's the genuineoriented Sushi-go-round.
(big aquariums are provided)

Features of Nigiri Chojiro
Services
Open kitchen enables
vibrant services.

Features of Nigiri Chojiro
Items	  (other	
  than	  Sushi)(items)Greatest number of items (other than Sushi)

morein the Sushi-go-round industry

70items

68items

60items

Greatest number of items

50items

40items

30items

20items

Nigirinotokubei 37items
Nagoyakatei

27items

Daiki Suisan

19items

Choushimaru 21items Gatten Sushi 23items

Gourmet	  Sushi-­‐go-­‐roundLess items means it is more simply a Sushi-go-roundless

Sushi-­‐go-­‐round* Uniquely researched by the Company from each competitor's website

36

Features of Nigiri Chojiro
InsideSophisticated atmosphere and spacious tables
Genuine-oriented counter seatsFeatures of Nigiri ChojiroLoca)onSuburban locations targeting families; parking lot for 30 cars;
including some in-building type restaurants

In-building type(Futako-Tamagawa branch)

38

Advantages of Nigiri ChojiroHigh	
  quality

Reasonable	
  priceLoca)ons	
  in	
  living	
  areas１

Elements of full-blown Tachi-Sushi can be enjoyed atreasonable price range.

２

Fulﬁlling	
  side-­‐menus
Separately placed tables and Zashiki rooms, notpursuing eﬃciency.
Wide variety of a la carte dishes, desserts and alcohols
are oﬀered.

３

Ability	  to	
  open	  new	  restaurants
Successful pattern is establishedusing existingpremises (pulling more customers even in locations
with lower rent).

1

39

Positioning of Chojiro
within SRS GroupTop of the pyramid
Extraordinary and celebratory elements are provided,
among every other situation of having foods.
Symbolic category representing the Japanese foodcompany group featuring "Sushi"
highaverage spending
about 2,350 yen
over 2,000 yen

price
low
40

Strategy of Chojiro

１
1

２
2

Continuous opening of
new restaurants

While ensuring the status of No.1 gourmet
Sushi-go-round in Kansai area, Kanto area isalso to be within the range.

Fostering/utilizing human

Unlike traditional Sushi chefs, a wide variety ofhuman resources is to be fostered and utilized

resources

systematically.

Omotenashi Dojo

(hospitality training)

３
3

Reinforcing star menus
making use of foodstuﬀ
straight from the source(items straight from the source at theirseasonal peak)
Creating cost merit at the Group's MD level41

Omotenashi Dojo (hospitality training)42Skillful Sushi-go-roundNigiri Chojiro
Seasonal menus are reinforced!
Seasonal menus are altered 15 times a year.
(Foodstuﬀs are altered three times at each season of spring, early summer, summer, fall and winter.)

Seasonal	
  menus43

Regular	
  menus

Skillful Sushi-go-roundNigiri Chojiro

44

Skillful Sushi-go-roundNigiri Chojiro
Also rich in dessert menu!
Dessert menu is comparable to Westernfood family restaurants.

Dessert	  menuHot/cold coﬀee and other items are alsoavailable.

45

Lunch	  menuSkillful Sushi-go-roundNigiri Chojiro

Weekday lunch menu is fulﬁlling and popular among housewives!

46

Support for inbound tourists
Touch panel is available in four diﬀerent languages (Japanese, English,
Chinese and Korean) and also Spanish in some restaurants.

47

Support for inbound tourists

Touch panel is available in four diﬀerent languages (Japanese, English,
Chinese and Korean) and also Spanish in some restaurants.

SpanishEnglishChineseKorean48

Skillful Sushi-go-roundNigiri Chojiro
Chef picks up live horse mackerel from the aquariumand makes full-body Sashimi (sliced raw ﬁsh).
In the end, even fried bones can be eaten.

49

Sister shops of Nigiri Chojiro

Nigiri Chujiro

Specialized in delivery

Specialized in delivery, serving Sushi of the same grade as Chojiro
Currently 6 directly-managed shops are in experimental operation in Kyoto pref.

50

New brandNigiri Chujiro

Specialized in delivery

High grade＜in experimental operation＞(average spending)(yen)

6 DM shops (Kyoto pref.)Higher grade &higher added-value

Sister shops of Nigiri
ChojiroSpecialized in delivery

1,600
average spending: 1,600 yen per person

segregation＜High profitability model＞
Monthly sales: 5 million yen
Operating income to sales: 10%
More eager approachto celebratory service strategy

1,500

upgradeLow price
1,400

over-the-counteraverage spending: 1,400 yen per person

Specialized in delivery＋

delivery"Extraordinary Sushi ataffordable price"* Share in delivery Sushi: about 50% (No.1)
1,300

Market size of delivery Sushi
about 50 billion yen (Source: Toyo Keizai)

Low priceaverage spending: 1,300 yen per person* Hard-fought competition with low price Sushi shops* Share in delivery Sushi: 2.4%

51

Mid-term management plan52

Towards	
  realizaIon	
  of	  "Sato	  Pyramid"

53

SRS group restaurants composition (current)
diamond shapehighdiamond	  shapecurrent

price

Nigiri Chojiro
Sushi-han

Washoku Sato

Katsuyalow

Number	
  of	
  restaurants

Santen54

SRS Group restaurants composition
Evolution phase 1: Near-future shape
Diamond shape to pyramid shapehighEvoluIon	  phase	
  1

Near-­‐future	
  shapecurrent

pricebroader-­‐based	
  pyramid	
  shapediamond	  shapepyramid	
  shapeNumber	  of	
  restaurants

fast-­‐casualfast-­‐casuallow	
  price	
  zone	  fast-­‐casualmore	
  restaurants	
  newly	
  opened55

Mid-term management plan
FY03/2019

Net sales: 52 billion yen Number of restaurants: 600
FY03/2019(billion yen)60

FY03/2017(as planned)

100

600 restaurant

Net sales: 52 billion yen

398 restaurant(billion yen)

348

329

restaurant

restaurant

43.4 billion yen

310

40.6 billion yen

restaurantNet	
  sales

221

5

Net	
  sales37.9 billion yen

restaurant

32.7 billion yen

Ordinary	
  income

25.7 billion yen

0.56

billion yen

0.94

billion yen

0.84
billion yen

0.36

billion yen

billion yen

0

2013_3
actual2014_3
actual2015_3
actual2016_3
actual2017_3
plan

2018_3plan

Ordinary	
  income

1.33

0

NOTE:	
  Number	
  of	
  restaurants	  2019_3 include	
  FC	
  and	
  overseas	
  

plan

56

FY03/2016

Mid-term management plan: Numerical targets

FY03/2019
51st Period
Net sales

52 billion yen

Number of restaurants

600

Ordinary income rate

5％

ROE

8％

Equity ratio

over 50％
57

Measures & Planned opening new restaurants
for the next term (FY03/2017)
Measures

Details

Reconstruction of working environment
Elimination of unpaid wages for overtime working
Approach to reduced working hours

Eﬀorts towards improvement have been continued, such as short-time
regular employee system and salaries calculation on minute-by-minutebasis. Factors leading to unpaid wages and excessive work should beanalyzed and corrected.

2

Experiments on various menu at Washoku Sato

Experiments on various menu should be carried out foreseeing 6
months ~ 1 year later, and upon veriﬁcation, such menu would be
introduced at every restaurant.
・"Reinforcing Sato-Shabu" ... addition of pork course and reinforcing
premium course
・Reinforcing beverages/alcohols

3

FC development of Santen restaurants

Aiming at opening 5 new FC restaurants

4

Measures for attracting inbound tourists

Building up arrangements for attracting more of increasing number of
inbound tourists at SRS restaurants (mainly group tourists).
Promotional activities towards travel agencies.

5

Making Taiwan Sato proﬁtable

Placing "all-you-can-eat style Sato-Shabu" at the core, operations
should be reconstructed and the restaurant should try to be profitable.

1・Logistics planning in line with the plan to open new restaurants

6

7

Purchasing by the Group as a wholePursuit of logistics synergies

・Production area development and stable delivery of "prawn" used at

Grouping together ﬁnancial/accounting
departments

The Group's financial/accounting departments should be integrated
around June, aiming at more efficiency in indirect business operations.

Largest-ever number of newrestaurants to be opened

Planned50

Santen.
・Scheduled increase in proportion of direct import

Planned
Washoku Sato
SantenSanten (FC)4
20
5

Nigiri Chojiro
Nigiri Chujiro
Katsuya
Katsuya (FC)

6
4
5
6

58

Performance forecasts
Increase in both revenues and income is anticipated for FY03/2017(million	
  yen)

FY03/2016(actual)

FY03/2017(forecast)AmountAmount+/- (amount)+/- (%)Net sales

40,061

43,400

3,339

8.3%

Operating income

542

850

307

56.8%

Ordinary income

361

940

578

260.1%Net income attributableto owners of parent

6

400

393 5,818.2%

59FY03/2016

Topics
Newly opened <overseas>

Newly opened <domestic>
Oct.

Santen: Nara-Sanjo branch (Nara pref.)Oct. 3rd branch in Thailand

Oct.

Santen: Sakai-Otori branch (Osaka pref.)Oct.

Nigiri Chujiro: Fushimi-Momoyama branch (Kyoto pref.)Nov.

Washoku Sato: Toyohashi-Nishitakashi branch (Aichi pref.)Nov.

Nigiri Chujiro: Yamashina-Kuyakushomae branch (Kyoto pref.)Dec.

Santen: Seiryodai branch (Hyogo pref.)"Washoku Sato Sriracha AEON branch"Dec. Nigiri Chojiro: Ibaraki-Masago branch (Osaka pref.)Jan.

Santen: Kyoto-Daigo branch (Kyoto pref.)Feb.

Santen: Harinakano branch (Osaka pref.)Feb.

Nigiri Chujiro: Katsura branch (Kyoto pref.)Mar.

Washoku Sato: Kishiwada-Araki branch (Osaka pref.)Apr.

Katsuya: FC Higashiosaka-Nishitsutsumi branch (Osaka pref.)Apr.

Katsuya: Kireuriwari branch (Osaka pref.)TopicsNov. The 200th branch of Washoku Sato was opened (Toyohashi-Nishitakashi)
Feb. President Sato Co., Ltd. (Taiwan) became a wholly-owned subsidiary(Danshui branch is in operation and the 2nd branch is planned)
May (planned)Santen: Narumi branch (Midori ward, Nagoya City) The 1st Santen restaurant in Tokai area!

60

Contact
SATO RESTAURANT SYSTEMS CO., LTD.
Corporate Planning Division (Taguchi, Okamoto, Natsui)

TEL: +81-6-7709-9977
email: 873@sato-rs.jp
Earnings forecasts and other descriptions concerning the future contained in this document are based on
information currently available to the Company. This includes largely uncertain elements and therefore
actual business performance and other elements may differ substantially due to various factors.We would
appreciate that you should understand the abovementioned presumptions and make decisions on any
investment according to your own judgement.