PLENUS : Summary of Consolidated Financial Results for the Three Months Ended May 31, 2022 (Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results for the Three Months Ended May

31, 2022 (Based on Japanese GAAP)

			July 13, 2022
Company name:	Plenus Co., Ltd.	Stock exchange listing: Tokyo
Stock code:	9945	URL: https://www.plenus.co.jp/
Representative:	President and Representative Director	Tatsuo Shioi
Inquiries:	Accounting Division/IR Department Manager	Toshiyuki Fujinami	TEL: [phone]
Scheduled date to file Quarterly Securities Report:	July 13, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	No
		(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the three months ended May 31, 2022 (from March 1, 2022 to May 31, 2022)

(1) Consolidated operating results (year to date)				Percentages indicate year-on-year changes
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Three months ended May 31, 2022	36,601		1.9	1,300	19.6	2,462	36.0	1,402	39.9
Three months ended May 31, 2021	35,932		7.5	1,087	-	1,811	-	1,002	-

(Note) Comprehensive income:	Three months ended May 31, 2022	1,373 million yen	(27.6%)
	Three months ended May 31, 2021	1,076 million yen	(-%)
	Earnings per share	Diluted earnings per
	share
	Yen		Yen
Three months ended May 31, 2022	36.55		36.42
Three months ended May 31, 2021	26.13		26.04

1. Consolidated financial position

			Total assets		Net assets			Equity ratio
			Millions of yen		Millions of yen				%
As of May 31, 2022			80,670		52,275				63.5
Year ended February 28, 2022			80,795		52,053				63.2
(Reference) Shareholders' equity:		Three months ended May 31, 2022	51,207 million yen
			Year ended February 28, 2022	51,036 million yen
2.	Cash dividends
					Annual dividends per share
			1st quarter-end	2nd quarter-end	3rd quarter-end		Fiscal year-end		Total
			Yen		Yen	Yen		Yen		Yen
Year ended February 28, 2022		-	30.00	-		30.00	60.00
Year ending February 28, 2023		-
Year ending February 28, 2023
(Forecast)			30.00	-		30.00	60.00
(Note) Revision of the dividend forecast released most recently:				No

3. Forecast of consolidated financial results for the year ending February 28, 2023 (from March 1, 2022 to February 28, 2023)

(Percentages indicate changes compared with the previous year for full-year results, and those compared with the same quarterly period of the previous year for quarterly results)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per share
		owners of parent
						Millions of
	Millions of yen		%	Millions of yen	%	yen	%	Millions of yen	%	Yen
Six months ending
August 31, 2022
(Cumulative)	74,180		4.4	3,430	60.0	3,790	(0.5)	2,230	4.9	58.10
Full year	149,800		4.7	6,060	49.5	6,530	(13.8)	3,040	36.5	79.21
(Note) Revision of the consolidated results forecast released most recently:		No

*Notes
(1)	Changes in significant subsidiaries during the three months ended May 31, 2022:	No
	(changes in specified subsidiaries resulting in the change in scope of consolidation):
	Newly consolidated: - company(ies) (company name(s)), Excluded: - company(ies) (company name(s))
(2)	Adoption of special accounting procedures used in preparation of the quarterly consolidated financial statements::	Yes
	(Note) (Notes) For details, please see "2. Quarterly consolidated financial statements, (3) Notes to quarterly consolidated
	financial statements, (Adoption of special accounting procedures used in preparation of the quarterly consolidated
	financial statements)" on page 9 of the attachments.

1. Changes in accounting policies, changes in accounting estimates, and restatement of prior-period financial statements

1)	Changes in accounting policies due to revisions to accounting standards and other regulations::	Yes
2)	Change in accounting policies other than item 1) above::	No
3)	Changes in accounting estimates::	No
4)	Restatement of prior-period financial statements::	No

(Note) For details, please see "2. Quarterly consolidated financial statements, (3) Notes to quarterly consolidated financial statements, (Changes in accounting policies)" on page 9 of the attachments.

1. Number of issued shares (common shares)
2. 1. Total number of issued shares at the end of the period (including treasury shares)

	As of May 31, 2022	44,392,680 shares	Year ended February 28, 2022	44,392,680 shares
2)	Number of treasury shares at the end of the period
	As of May 31, 2022	6,012,874 shares	Year ended February 28, 2022	6,012,874 shares
3)	Average number of shares during the period (year to date)
	As of May 31, 2022	38,379,806 shares	Three months ended May 31, 2021	38,352,672 shares

• Quarterly financial results are not subject to quarterly reviews by a Certified Public Accountant or audit firm.
• Explanation of appropriate use of financial results forecasts and other special notes
• • Any statement on the future such as an outlook for financial results included in this material is based on information the Company presently has and certain assumptions the Company considers reasonable, and the Company does not promise such will be achieved. In addition, actual financial results may significantly differ due to various factors.
• Method to obtain supplementary materials on quarterly financial results:
• • Supplementary materials on quarterly financial results will be posted on the IR information section of the Company's website on July 14, 2022 (Thursday).

• Table of Contents of Attachments

1. Qualitative Information on Quarterly Financial Results under Review .....................................................................	2
(1)	Explanation of consolidated operating results....................................................................................................	2
(2)	Explanation of consolidated financial position ..................................................................................................	4
(3)	Explanation of future forecast information such as consolidated financial results forecasts .............................	4
2. Quarterly consolidated financial statements...............................................................................................................	5
(1)	Consolidated balance sheets...............................................................................................................................	5
(2)	Consolidated statements of income (year to date) and consolidated statements of comprehensive income
	(year to date) ......................................................................................................................................................	7
	Consolidated statements of income (year to date) .............................................................................................	7
	(Three-month period) ...................................................................................................................................	7
	Consolidated statements of comprehensive income (year to date) ....................................................................	8
	(Three-month period) ...................................................................................................................................	8
(3)	Notes to quarterly consolidated financial statements .........................................................................................	9
	(Notes regarding the going concern assumptions) .............................................................................................	9
	(Notes when there is a significant change in the amount of shareholders' equity) ............................................	9
	(Adoption of special accounting procedures used in preparation of the quarterly consolidated financial
	statements) .........................................................................................................................................................	9
	(Changes in accounting policies) .......................................................................................................................	9
	(Additional information) ....................................................................................................................................	9
	(Segment information) .....................................................................................................................................	10

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1. Qualitative Information on Quarterly Financial Results under Review

1. Explanation of consolidated operating results
   During the three-month period ended May 31, 2022, the future outlook for the Japanese economy showed signs of recovery partly due to the effects of measures against the spread of COVID-19 and various policies on economic and social activities. However, amid concerns over new waves of COVID-19 in China and the prolonged situation in Ukraine, the future outlook still remains uncertain due to constraints on the supply of raw materials and energy, and soaring prices.
   In the food services industry, competition among companies is becoming more severe, although there are signs of a recovery mainly as measures to prevent the spread of infection were lifted and progress was made in vaccinations, in addition to the expected market downsizing caused by the declining birthrate and aging population. And companies are having to undergo large reforms due to the significant changes in lifestyles and consumer behavior resulting from the widespread idea of remote work and acceleration of digitalization. In addition, the business environment continues to be challenging as price hikes of raw materials and energy, rising labor costs, and increasing geopolitical risks may greatly affect economic activities.
   Under these circumstances, in an effort to increase customer satisfaction, the Group focused on further enhancing its business foundations by developing existing brands and on operating stores with due consideration to the safety of customers and employees. As part of efforts to develop existing brands, we worked to expand over-the-counter sales. We did this through such measures as launching campaigns using products manufactured at the Group's plants, implementing sales strategies with business type-specific targets, and expanding stores that adapt to digital marketing and delivery services using smartphone applications and other platforms while continuing to focus on the promotion of franchising. The Group continued to improve its contactless operations by strengthening its online ordering, as well as cashless payments.
   With regards to domestic same-store sales during the three months ended May 31, 2022, Hotto Motto continued to remain strong, increasing sales by 0.7%. In addition, sales at YAYOI and MK RESTAURANTS are on a recovery trend, increasing 19.8% and 9.1%, respectively. In overseas markets, although the business environment remained tough in some countries and regions mainly due to demand for restricting operations due to the spread of COVID-19, the recovery trend was accompanied by a resumption of economic activities.
   As a result of the above, the Company posted net sales of 36,601 million yen (up 1.9% year-on-year), operating profit of 1,300 million yen (up 19.6% year-on-year), ordinary profit of 2,462 million yen (up 36.0% year-on-year), and profit attributable to owners of parent of 1,402 million yen (up 39.9% year-on-year) for the three-month period under review.
   Net sales increased year-on-year due to an increase in net sales at existing stores of YAYOI and Hotto Motto, despite a decrease in net sales resulting from the transfer of directly managed Hotto Motto stores to franchised stores.
   Meanwhile, profits increased year-on-year due to an increase in net sales at existing stores, although the cost of sales ratio rose due to soaring raw material and energy prices. The increase in ordinary profit was mainly due to the posting of 556 million yen of a subsidy for cooperation from local governments for shortening business hours to prevent the spread of infections and employment adjustment subsidies as subsidy income in non-operating income.
   [Status of store development in Japan]

End of previous

Opening

Closing

End of first quarter

Renovation/

fiscal year

under review

Relocation

Hotto Motto

2,488 stores

1 store

9 stores

2,480 stores

7 stores

YAYOI

371 stores

-

5 stores

366 stores

2 stores

MK RESTAURANTS

25 stores

-

-

25 stores

-

Total

2,884 stores

1 store

14 stores

2,871 stores

9 stores

[Status of store development outside Japan]

Area

End of previous

Opening

Closing

End of first quarter

fiscal year

under review

Hotto Motto

China

1 store

-

-

1 store

South Korea

7 stores

-

-

7 stores

YAYOI

Thailand

193 stores

2 stores

1 store

194 stores

Singapore

8 stores

-

1 store

7 stores

Australia

6 stores

-

-

6 stores

Taiwan

22 stores

-

-

22 stores

USA

3 stores

-

-

3 stores

Philippines

7 stores

-

-

7 stores

Malaysia

5 stores

-

-

5 stores

China

1 store

-

-

1 store

Total

-

253 stores

2 stores

2 stores

253 stores

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The Group's business performance by segment is as follows.

[Hotto Motto Business]

As a top brand of takeout bento boxes, and with a safe and secure quality management system with special care for delicious rice, the Company aimed at increasing customer satisfaction by providing high-value-added products by promoting the use of the Group's plants and others, on the basis of focusing on tasty meals, using carefully selected high-quality rice grown in Japan, and providing bento boxes that are freshly made in stores.

We also continued to improve contactless operations by strengthening online ordering, delivery services, and cashless payments, in addition to taking measures to capture new customer groups through selling products targeting younger generations and families, and driving repeat visits to stores through customer-participation promotional campaigns.

Furthermore, with regards to franchise development, we continued to actively work to acquire new owners and increase the number of stores for the existing owners through the use of the "unit franchise system."

As a result of the above, the Company posted net sales of 26,226 million yen (down 1.9% year-on-year) and an operating profit of 1,630 million yen (down 5.8% year-on-year). Net sales decreased year-on-year as a result of a decrease due to the transfer of directly managed stores to franchisees, despite an increase in net sales at existing stores (up 0.7% year-on-year). Profits decreased year-on-year due to an increase in the cost of sales ratio, despite efforts to increase net sales at existing stores and improve the efficiency of store expenses.

[YAYOI Business]

Based on the basic policy of offering set meals made with carefully selected ingredients and a home-made feel at reasonable prices, we worked to respond to a wide range of customer needs by implementing the targeted sales strategies and sales promotion measures utilizing the YAYOI Official App and the functions of the new ticket vending machines.

As a result of the above, the Company posted net sales of 7,198 million yen (up 17.3% year-on-year) and an operating loss of 262 million yen (operating loss of 571 million yen in the same period last year). Net sales rose year-on-year due to an increase in same-store sales (up 19.8% year-on-year). Profitability improved year-on-year as the magnitude of loss decreased due to an increase in net sales at existing stores and improved efficiency in store expenses.

[MK RESTAURANTS Business]

We enhanced the product capability of shabu-shabu (thinly sliced meat boiled with vegetables) served with hearty ingredients and unique soups by offering limited-time-only pot soups, such as "Grated White Radish Pot Soup," specially selected ingredients and dim sum (small Chinese dishes). In addition, we worked to encourage customers to visit our stores by regularly implementing sales promotion measures. We also sought to respond to a wide range of customer needs by expanding takeout menus and delivery services.

As a result of the above, the Company posted net sales of 531 million yen (up 6.9% year-on-year) and an operating loss of 96 million yen (operating loss of 84 million yen in the same period last year). Net sales rose year-on-year due to an increase in same-store sales (up 9.1% year-on-year). Profits decreased year-on-year due to an increase in the cost of sales ratio, despite efforts to increase net sales at existing stores and improve the efficiency of store expenses.

[Overseas Business]

In the overseas business, efforts were made to restore profitability by enhancing profitability of existing stores through such measures as implementing market-specific initiatives to boost sales and reducing costs at stores through the local procurement of ingredients. However, although the business environment remained tough in some countries and regions mainly due to the impact of the spread of COVID-19, the performance has been on a recovery trend as economic activities have resumed.

As a result of the above, the Company posted net sales of 922 million yen (up 13.5% year-on-year) and an operating loss of 117 million yen (operating loss of 107 million yen in the same period last year).

[Other]

MSF Co., Ltd., whose main business is as an original equipment manufacturer (OEM) of seasonings and processed food, proactively proposed new products to existing business partners while conducting marketing activities to acquire new ones. MSF Co., Ltd., which also engages in the development of seasonings and other ingredients used at the Group's stores, focused on expanding the number of products.

As a result of the above, the Company posted net sales of 1,723 million yen (down 1.2% year-on-year) and an operating profit of 104 million yen (down 18.5% year-on-year).

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