Financial Results for the 2Q of
Fiscal Year Ending January 31, 2021
SILVER LIFE Co., Ltd.
The First Section of the Tokyo Stock Exchange (9262)

Summary of the 2Q Results andWhole Financial Year Forecast-2-

FY2021 2Q Financial Results（百万円）

FY2021
YoY
Changes

FY2020Composition

Ratio

Comparedwith
Forecast

YoY
ChangesComposition

FY2021
Forecast

Ratio

Sales

4,888 16.1% 100.0%

51.3%

4,212

11.1% 100.0%

9,530

Gross
Profit1,459 19.1%

29.9%

59.1%

1,226

14.3%

29.1%

2,470

Operating
Profit611 48.6%

12.5%

94.1%

411 ▲5.0%

9.8%

650

Ordinary
Profit671 38.2%

13.7%

87.3%

486 ▲0.2%

11.5%

770

Profit417 38.3%

8.5%

90.8%

302

7.2%

460

0.7%

-3-

Sales per Category: Franchise Chains

FranchisechainsSales 3,526 million yen (YoY +15.0%)
Stores : 897 (compared to the previous year-end ＋63） Exceeded annual plan
The positive impact of the July 2019 departmental food price reduction continues（ Millions of yen ）-4-

Sales per Category: Facilities for the Elderly, etc.

Sales 601 million yen（YoY +0.7 %）Facilities for theelderly

Cilled ： 90% of facility sales, new sales activities have almost stopped.
Frozen ：10% of facility sales, sales activities limited by COVID19 but increasing
slowlyAs of the last month of 2Q, 15% of facility sales（ Millions of yen ）-5-

Sales per Category: Direct sales / Others

Sales 760 million yen（YoY +38.6%）
Direct Sales/
OthersDirect sales: Maintain a certain level of sales
OEM: Volume of orders from existing large customers continued to decline.
At the beginning of the fiscal year, the frozen lunch box production line was limited
to 22,000 units/day, but by the end of 2Q, it was under pressure due to theincrease in FC, and was producing 20,000 units/day.
Adjust advertising volume at 15,000-18,000 units/day while monitoring overtime
hours. Additional capital investment in July 2021 will bring the production limit to
50,000 units/day.

（ Millions of yen ）-6-Number of Stores
33 "Magokoro Bento" stores and 30 " Haishoku no Fureai" stores increase(compared to the previous year-end). 897 stores in total (as of the end of Jan. 2021)
Increase in the Number of Stores（ numberof stores ）
（店舗数）
800

368

700

338
600

299
245

500

196
400

14

85

138

300
200

332
100
0

173
1

15

FY2008FY2009

363

352

356

367

381

FY2014FY2015FY2016FY2017FY2018430

496

FY2019FY2020

529

240

88
FY2010FY2011FY2012FY2013

Magokoro Bento

FY2021Haishoku no Fureai* 1. "Rakuraku Bento" is not included in the above number of stores since it will only be a store opened alongside a member store.
2. Since store sales start from zero and gradually increase after the opening, contribution to sales will be from the next year after
the store opens.

-7-

Analysis of Sales Figures（Millions of yen）

211

436

23

3

FC Loyalties,
etc.

Facilities for the
Elderly

4,888

Direct sales/ Others

4,212
FC Food Sales

676 million yen increase
FY20202Q

FY20212Q-8-

Analysis of Ordinary Profit Figures（Millions of yen）

209

23
FC
Loyalties,
etc.

486
Food Sales
Profit35
Advertising
Expenses

-62
-11
Fare

Payment
Charges-7-2Outsourcing
Expenses

Others671

Total Advertising costs : FY2020 133→FY2021 98
・FC & Eldary facirities Advertising fee （FY2020 77→FY2021 71）
・Advertising costs for direct sales (55→26)
Adjusting to the limits of the lunchbox production line
Profit increase of 35 million yen due to advertising reduction effects
Gross profit contribution of 232 million yen due to sales increase islarger than the overall profit contribution.

185 million yen increase
FY20202Q

FY2021
2Q-9-

FY2021 Forecast(Millions of yen)

FY2021 Forecast

•
•
•

YoY
Changes

FY2020 Results

YoY
Changes

Sales

9,530

7.9%

8,832

13.2%

Gross
Profit

2,470

-5.4%

2,610

16.8%

Operating
Profit650-30.4%

934

5.6%

Ordinary
Profit770-29.1%

1,086

8.4%

Profit460-32.2%

678

6.8%

Sales forecast is stated on the Sales Forecast per Sales Category page
Gross profit decreased significantly due to related expenses (350 million yen) such as depreciation costs
associated with the launch of the new factory.
SG&A expenses are expected to increase due to advertising expenses for the direct sales business associatedwith the new factory launch, software usage fees and depreciation costs due to system enhancements.

- 10 -

FY2021 Sales Forecast per Sales Category

6,940 million yen （YoY +9.3%）
Franchise chains

Facilities forthe elderly

Direct Sales /OthersEstimated number of stores at the end of the fiscal year: Approximately 890 stores (50to 60 stores compared to the previous fiscal year). Although we have hope to continue
opening more stores, we expect to open about 50 stores regularly each year.

1,210 million yen （YoY +1.6%）
Sales are expected to recover with the broader development of the facility-specificfrozen food-packs "Kodawari Chef“.

1,380 million yen （YoY +6.9%）
The contract volume of existing major customers is expected to continually decrease.
The direct sales business is expected to increase moderately based on production
capacity.

- 11 -

FY2021 Forecast overview
FY2021 Forecasts unchanged at this time
＜Factors＞
Postponement of new factory-related expenses to the second half of the fiscal year.
Business performance in the second half may fluctuate significantly depending on the progress offactory start-up.

＜Forecast for the second half＞

Sales○FC store sales are expected to exceed the plan.（Price down has been successful）
×Facilities for the eldaerly are expected to be weaker than planned based on the current
situation.（COVID19 influence continues）△Uncertainties in direct sales have increased.
The timing of the production increase may change depending on the progress of the newfactory operation.
Increase in number of competitors, and it is quickly becoming a red ocean.

GrossProfit×Depreciation and amortization expenses will be incurred as the factory begins operations.
○Gross profit margin set at low level in anticipation of trial and error during plant start-up
period×Efforts are needed to make up for the delay in the start of operations (e.g., purchaseof spare equipment earlier than planned).
×Unplanned increase in factory personnel (strengthening mid-career hiring)

SG&A

×Advertising expenses will be gradually increased while maintaining a balance

expenses

between production volume and order volume.
- 12 -

Factory Operation Schedule
April : New Factory starts operation
The 1st factory will be dedicated to refrigeration from summer onward, while
monitoring its operation status, to enable increased production.
FY2021
FY2022
FY2023
1st Factory

Chilled/Frozen Manufacturing（Gunma factory）
Expansion of freezing equipment

2nd Factory（Tochigi factory）

Start operation

Frozen foods increase

Add production lines as needed- 13 -

Approaches to ESG
Society
We believe that the growth of our business itself is our commitment to society. We deliver well-balanced lunches
to the homes of elderly people who are too old to go shopping on their own. We believe that this business has ahigh social significance.

We, Silver Life, will contribute to society by growing ourbusiness with integrity in accordance with our corporate
philosophy: "We, Silver Life, will create a society where
everyone can age with peace of mind from theperspective of food.

Environment
・Efforts to reduce food loss
We commercialized the extra cooked ingredientsas “Omakase Kobachi". We have started to usethem as extras in our sales products. This will help
to reduce
food residue.

Governance・We have the following systems in place to strengthen
our management monitoring system
Ratio of independent outside directors: 1/3
Transition to a company with an audit committee
・ComplianceContinue to provide compliance training to all
employees
We will continue our efforts without loosening our grip.
- 14 -

Company Overview- 15 -

Our Management Philosophy and Mission【Our Mission】
We prepare bento’s at reasonable prices and deliver to your home every day sothat elderly people living alone or needing long-term care who have difficulty
cooking or going out to shop can eat without any trouble.

- 16 -

Company Overview
Company NameSILVER LIFE Co., Ltd.

Representative

President, CEO : Takahisa Shimizu

Established

October 2007

Capital Stock

710 million yen (as of July 31, 2019)

Address

Highness Lofty Level 2, 4-32-4, Nishishinjuku, Shinjuku-ku, Tokyo, 1600023, Japan

Businesses

・Franchise management of food delivery service for the elderly(Service names: “Magokoro Bento”, “Haishoku no Fureai”)
・Food ingredient sales to senior-care facilities(Service names: “Magokoro Shokuzai Service”， “Kodawari Chef”)
・Own brand and OEM sales of frozen bento products(Service name: “Magokoro Care Shoku”)

Websitehttps://www.silver-life.co.jp/

Employees

260 (Full-time: 101 / Part-time: 159）As of the end of July 2020

Factory

1678-1, Nakano, Ora-machi, Ora-gun, Gunma, 370-0603, Japan

Distribution Center

195-1, Akaiwa, Chiyoda-machi, Ora-gun, Gunma, 370-0503, Japan- 17 -

Our History
Date

Main store / Business development

Oct. 2007 Company established in Setagaya-ku, Tokyo
Nov. 2007
Apr. 2009
Sep. 2010

Service” to senior-care facilities
Purchase of the Company plant site in Ora-machi, Ora-gun,
Gunma

May. 2013
Aug. 2013 Absorption-type merger with Next Community Co., Ltd.
Feb. 2014
Apr. 2014
Oct. 2014 Enfranchisement of all directly managed storesFeb. 2016 Acquired ISO9001 certification for Our factory (Kanto region)
Mar. 2016 Head office moved to the current site in Shinjuku-ku, Tokyo

Accomplished 300 "Magokoro Bento" stores
Launch of our second franchise chain “Haishoku no Fureai”
Launch of OEM sales

Accomplished a total of 500 "Magokoro Bento" & “Haishoku no Fureai”

Sep. 2016
Oct. 2017

Opened the 1st directly managed store in Setagaya-ku, Tokyo
Launched our first franchise chain “Magokoro Bento”
Accomplished 100 "Magokoro Bento" stores
Launch of our food ingredient delivery service “Magokoro ShokuzaiJun. 2012
Feb. 2013

Stores / Business development

storesDistribution center opened to Chiyoda-machi, Ora-gun,
Gunma

Oct. 2017 Listed on TSE Mothers
May. 2019

Accomplished a total of 700 "Magokoro Bento" & “Haishoku no Fureai”
storesJan. 2020 Listing shifted to the TSE, First Section- 18 -

Business Model
Schematics of our Business Operation
FY2021 Sales Percentage

Raw materials providers / Out-sourcing factories
Foods,
Cooked foods

Loyalties, etc.

Payment

Kanto Region
Factory

Our
Company
Management
Cooked foods

Frozen
Bento

Deliveryfees

Payment
loyalties,
Etc.

Payment

496 storesnationwide*

Franchise chain
stores
338 storesnationwide*

Bento
Payment

OEM supplier
General Customer

General Customer

Food & Ingredients
Net Sales
Foodingredientpayment
Food
Ingredient,
etc.

Foods
Delivery

Facilities for the
Elderly, etc.

Mainly Wholesale Ingredients
A continuous profit system in which ourfood net sales increases proportionally to
the growth in net sales (number of meals)of franchise chain stores.
(Food net sales include sales for facilities
for the elderly, OEM, and in-house sales)*As of the end of July 2020- 19 -

The Market to which we belong- 20 -

(increasing population of late-stage

External Environment elderly)

Our main target, the late-stage elderly, will increase exponentially beyond 2025
Population trends and future forecasts for theelderly (over 65 years old) and late-stage elderly (over 75 years old)(ten thousand)

2,417 2,446 2,387

2,500

2,180 2,288

Baby boomer generation will
become late-stage elderly
2,000
1,734
1,613
1,517
1,407

1,500
1,301

1,798

892

2,277

2,248

1,872

1,760
1,681
1,747

1,522
1,497 1,428

1,000

2,239
2,260

1,643
1,154 1,133

1,424

900

1,258

699
597

516
500
309
107

376
164

366
224

Future Forecast

0

Population age 65-74

Population aged over 75

Source: Cabinet Office, White Paper on the Aging Society- 21 -

(a business that does not rely on long-term

External Environment care insurance)

Changes in the Working Generation and the Elderly Population(ten thousand)

The working generation (15 to 64 years old) is decreasing,and the elderly population is increasing

6,000
4,000
2,000

Dependent Population(age 65+)
18.26 million
8.86 million

33.47 million

37.82 million

37.04 million

0

1975年

-2,000

1995年

2015年

2035年

2055年

Moving toward society where 1.3 people of the working
generation will support 1 person aged over 65.
Social security deposit benefits per person will decrease-4,000-6,000The increase of expenditure toward COVID-19 measuresin 2020 makes it even more difficult to secure financial
resources for long-term care and welfare-8,000Supporting Population(age 15~64)-10,000

Future Forecast

Source: Cabinet Office, White Paper on the Aging Society(cases)Bankruptcies in Elderly Welfare / Nursing Care Businesses
108 111 105 111120(90% of net sales rely on the long-term care insurance
system) The long-term care business is destined to
become difficult in the future.

100

76

80

60

46
35

40
20

15

54
38
27

23

54

In this upcoming era, only businesses such as food
distribution services for the elderly, which can be
managed without relying on long-term care insurance,
can support the lives of the rapidly increasing elderly
population.

33

19

0
2005

2007

2009

2011

2013

2015

2017

2019

Source: Tokyo Shoko Research, 1st half of 2020 "Elderly Welfare / Nursing Care
Business" Bankruptcy Situation- 22 -

Our Company Features
and Advantages- 23 -

Our Advantage: FC Network stores opened Low-cost opening (non-visit-type stores with no restriction to location / no large kitchen equipment required) The simple process of preparing cooked ingredients and delivering (the business can be started alone) Stable supply of high-quality cooked ingredients from FC headquarters (no cooking experience required)This helped the number of stores to increasesignificantly in a short period of time

(Stores）
900
800
700

338

February 2014
Launch of our franchise chain“Haishoku no Fureai”

600
500

February 2013

196

Acquired Kanto region factory
400

9April 2009300

Launched our first franchise chain“Magokoro Bento” in Ota-ku, Tokyo

200

November 2007

Launched our first directly
managed store in Setagaya100 ku, Tokyo
0

299

1

1
14

85

FY2008FY2009FY201085

138

Food Distribution Service
No. 1 Number of Stores *

7
4

3

2
14

245

323

361

352

356

367

381

FY2014FY2015FY2016FY2017FY2018

430

496

238

169

FY2011FY2012

Magokoro Bento

FY2013

Haishoku no Fureai

Directly Managed StoreFY2019FY2020* Our company investigation- 24 -

Production System allows Multi-Variety

Our Advantage: Random Production

Our factory 3 days menu

*this is an image

 Manufacturing line required in a general foodfactory (dedicated line for a single productgroup)
A meat buns dedicated factory (1 million meat buns produced
daily flow from a buns dedicated machine to a conveyor.
Although there are meat buns and bun with bean-jam filling
differences, they are "Principally the same product group").

 Manufacturing line required for food distribution
service (line that can handle random production ofother varieties)
Since meals are distributed daily, the same product group cannot beprovided every day. 12 items made today, 12 items made tomorrow, 12
items made on the 3rd day, all should be different.

Only few factories have multi-variety random production lines which are thought to beinefficient (Usually cannot be maintained without a certain sales scale like our company)↓
As a result: Managing low-cost manufacturing that generates profit
despite the large variety of products- 25 -

Production System that provides an

Our Advantage: abundant Menu with Low Prices

 Tenderness, seasoning, and nutritional balance suitable for the elderly to eat
 Rich menu variety (more than 1,000 items) you will never get tired of for your everyday meals
 Delivered to franchise chain stores refrigerated (chilled) to improve texture (regular meals)
Regular meal
 Mainly Japanese food bento for thegeneral elderly. Consideration to
nutritional balance and ease of eat

Komachi (smaller portion)
 A bento with fewer calories, less salt,

and a smaller portion of a regular mealfor elderly people with smaller appetites

Puréed meal
 A puréed meal bento which looks thesame, for elderly people who havedifficulty chewing and swallowing

Price：
450yen+tax～

Price：
320yen+tax～

Price：
540yen+tax～（sides dish only）（sides dish + rice）（sides dish only）

Calorie-adjusted meal

Protein-adjusted meal A bento for people who need to calculate A bento for people who need to calculate

calories and salt intake. Manufactured to
be almost 240 kcal no matter what you
eat

protein intake, such as people who go toa dialysis clinic regularly. Protein is 10g orless per meal

Price：
600yen+tax～

Price：
700yen+tax～（sides dish only）（sides dish only）- 26 -

Our Advantage

 A p r o d u cti on l i n e t h a t c a n m a nuf a cture r e f r igera ted ( c hi lle d)

Production Systemi ngr e dients s pe c i alizing i n f ood di s t ribution
 Fl e xi b l e p r o d u cti on s ys t e m c a p a bl e o f m ul t i -va riet y m ul t i -production
 M e rit of s c a l e a nd r e a s ona ble pr i c e l i s ting d u e t o ma s s p r o d ucti on

 "No. 1” number of stores in the industry (An internal investigation of Magokoro

Franchise Chain
Network

Bento & Haishoku no Fureai total) of our food distribution franchise chain network forthe elderly (834 stores total as of the end of July 2020)
 A store network that covers the last mile to your home

Our biggest advantage is the consistent system we have from manufacturing to delivery- 27 -

Our Advantage (summary) Consistent System
GeneralFoodDistribution
RelatedCompanies

Manufacturer
Development
開発

Manufacturing
製造

Company
Product development
Manufacturing Factory,by Nutritionist
Affiliated Factory

Logistics
Companies

Logistics
物流

Food Distributor Business Area
販売
Sales

Picking of Freezing /Franchise chains,
Refrigerating Warehouse Facilities for the elderly,(October 2017)
OEM/Others

配達Delivery

Delivery to customers
from our nationwide
Franchise chain store
network

Feedback from franchise chain stores and customers

Purposeand
Features・Cost advantage due to mass production
・Product development based on customer
feedback (franchise chain stores)
・Ensure the "Safety and Security"

・Efficiency of storage anddelivery
・OEM sales expansion

Food distribution service for the elderly
Number of stores: 834(As of the end of July 2020)- 28 -

Medium-Term Business Plan
FY2021 - FY2025- 29 -

Sales Forecast
Sales Projection Forecast

8.8 billionyen

9.5 billionyen

10.3 billion
yen

11.5 billion
yen

14 billion
yen
12.7 billion
yen

OEM / Others

Facilities
for theElderly

FranchisechainsSales Forecast
FY2020

FY2021

FY2022

FY2023

Sales Goals
FY2024FY2025- 30 -

Profit Forecast and Goals after Capital Investment
Operating Profit / EBITDA Projection Forecast(1) Assuming operation of the 2nd factory from Q3 of FY2021(2) Assuming the operation of a new warehouse from the Q2 of FY2022→ Profit will temporarily decrease due to increased initial cost and depreciation
burden during the operation→ However, the manufacturing and storage capacity expansion will help 1.6 billion
yenincrease sales to bring a V-shaped recovery to profits.

The expected payback period for the 2nd factory is 10 years
1 billionyen
900 million
yen

EBITDA
900 million
yen

600 million
yen

Operating
Profit

1.1 billion
yen

FY2021

1.6 billionyen

1.3 billionyen

1.1 billion
yen

700 million
yenProfit Forecast
FY2020

1.8 billionyen

2 billionyen

FY2022Goal
FY2023

FY2024FY2025- 31 -

The Basis for 5-year Numerical Plan
FY2021

FY2022 – FY2025

Sales

 Franchise chains are expected to raisearound 700 million yen every year Facilities for the elderly are shifting tofrozen food-packs
 OEM sales are expected to decline
 Direct sales are adjusting shipment until
the production system is in order Franchise chains will shift their chilled
production to a new factory and after stablerunning, with the expectation of starting a third
brand, the growth will accelerate Facilities for the elderly continue the shift tofrozen food-packs
 We aim to acquire new OEM sales brands
 Direct sales aim to increase sales by gradually
increasing production

Cost Increase in depreciation cost andpersonnel due to running the 2nd factory A short-term cost rate increase to establish
the production system Renovated the 1st factory to a dedicatedfreezing factory The cost rate improved after 2nd factory started
running Investment to improve production efficiency at
1st and 2nd factories

Selling &Management
Expenses 250 million yen investment for production
management systems, etc.
* Expected to be launched and in-service
before the 2nd factory starts running Start running the new warehouse (total
investment of 900 million yen planned beyond
2021)*Establishment of a frozen bento picking system

 Resuming sales of frozen bento’s and using
expenses for advertising- 32 -

Investment Plan
Investment

1st
Factory

2nd
Factory

Frozenwarehouse

SoftwareInvestment
Amount

200 million yen(additional investment
amount）

Investment
Content
Frozen foods Factory
to replace chilled & frozen
foods factory
Products for OEM & Direct
Sales

Cilled foods Factory

3.7 billion yen

900 million yen

250 million yen(Vacuum packing method)

Products for FC storesand facilities

Investment Results Increase in production volume and improved productivity
specializing in manufacturing frozen products instead ofboth frozen and chilled foods products

 Maximum 150,000 meals / day manufacturing capability
 The decrease in the amount of deliveries due to theextended expiration date

Frozen foods
Warehouse Eliminating bottlenecks to frozen bento product sales thathave a large growing demand by creating a warehouseexclusive to frozen products
 Improving productivity by consolidating warehouses
 Reduction of external warehouse costs

Production
Management System

 Visualization and efficiency improvement of production
management by integrating production management andmeasuring systems
 Production and management system cooperation by ERP

By 2025, when the number of late-stage elderly people will increase, we will build our in-houseinfrastructure, lay out the foundation, and aim for the No. 1 share in the market expansion period.
- 33 -

Handling of this Document
 The statements in this document regarding future-prospects are based on current
information and may fluctuate due to economic trends, market environment, our relatedindustry trends, and other internal and external factors. Therefore, please have in mind
that there are risks and uncertainties that the actual results may differ from thosedescribed in this document regarding future-prospects.
 This document does not constitute or solicit an application for acquisition of any
securities, an application for sale, or an application for purchase (hereinafter referred toas “solicitation”) and is not intended to perform any solicitation activities and may not be
the basis of any contracts or obligations.
 Although we take the utmost care for the information in this document, there may beerrors in the posted information, and you may experience damage from data falsification
or data downloaded by a third party, but we do not take any responsibility for any
reason.

- 34 -