Plenus : Summary of Consolidated Financial Results for the Nine Months Ended November 30, 2021 (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 Nine Months Ended

November 30, 2021 (Based on Japanese GAAP)

			January 14, 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:	January 14, 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 nine months ended November 30, 2021 (from March 1, 2021 to November 30, 2021)

(1) Consolidated operating results (cumulative)						(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		%
Nine months ended November 30,
2021	106,994	1.9	3,239			-	6,305	856.7		3,456		-
Nine months ended November 30,
2020	105,019	(6.9)	186		11.2	659	7.1		(931)		-
(Note) Comprehensive income:	Nine months ended November 30, 2021		3,630 million yen	(-%)
	Nine months ended November 30, 2020		(825) million yen	(-%)
	Earnings per share	Diluted earnings per
	share
		Yen				Yen
Nine months ended November 30,
2021		90.09	89.76
Nine months ended November 30,
2020		(24.31)				-

(Note) Diluted earnings per share for the nine months ended November 30, 2020 are not stated, because although there are dilutive shares the Company reported a net loss per share.

1. Consolidated financial position

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

%

As of November 30, 2021

83,316

53,219

62.7

As of February 28, 2021

80,389

51,867

63.4

(Reference) Shareholders' equity:

As of November 30, 2021

52,233 million yen

As of February 28, 2021

51,001 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, 2021

-

0.00

-

30.00

30.00

Year ending February 28, 2022

-

30.00

-

Year ending February 28, 2022

(Forecast)

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, 2022 (from March 1, 2021 to February 28, 2022) (Percentages indicate year-on-year changes)

	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
Full year	145,230		3.4	5,400	498.1	6,040	196.4	2,510		-	65.45
(Note) Revision of the consolidated results forecast released most recently:		No

*Notes
(1)	Changes in significant subsidiaries during the nine months ended November 30, 2021:	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) For details, please see "2. Quarterly Consolidated Financial Statements and Key Notes, (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:	No
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

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 November 30, 2021	44,392,680 shares	As of February 28, 2021	44,392,680 shares
2)	Number of treasury shares at the end of the period
	As of November 30, 2021	6,012,874 shares	As of February 28, 2021	6,041,555 shares
3)	Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Nine months ended November 30,	38,370,748 shares	Nine months ended November 30,	38,343,866 shares
	2021	2020

• 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 they will be achieved. In addition, actual financial results may significantly differ due to various factors.
• Method of obtaining 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 January 17, 2022 (Monday).

• 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 and Key Notes....................................................................................	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
	(Nine-month period).....................................................................................................................................	7
	Consolidated statements of comprehensive income (year to date) ....................................................................	8
	(Nine-month period).....................................................................................................................................	8
(3)	Notes to quarterly consolidated financial statements .........................................................................................	9
	(Notes regarding the going concern assumption)...............................................................................................	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
	(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 nine-month period ended November 30, 2021, consumption activities in the Japanese economy continued to face severe conditions due to the impact of a surge in crude oil prices and higher commodity prices on top of the impact of the spread of COVID-19.
   The future outlook in the food services industry remains uncertain mainly due to the emergence of a new variant although there are signs of a recovery as the declaration of a state of emergency and measures to prevent the spread of infection were lifted and progress was made in vaccinations. The meal placement industry remained strong thanks to increased demand for takeouts and deliveries on the back of COVID-19 and due to changes in consumer lifestyles. Meanwhile, competition is intensifying beyond business types with restaurants and diners entering the takeout market.
   Under these circumstances, in an effort to increase customer satisfaction, the Group focused on 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.
   Hotto Moto continued to improve its contactless operations by strengthening its online ordering and delivery services, as well as cashless payments. YAYOI sought to respond to a wide range of customer needs by expanding demand for takeouts and breakfast.
   With regards to net sales at existing stores in Japan during the nine-months period under review, 2021, Hotto Motto remained strong, increasing sales by 5.0%. However, YAYOI and MK RESTAURANTS continued to face a challenging business environment, with YAYOI down 3.0% and MK RESTAURANTS down 23.0%, impacted by requests to stay at home and shorten business hours in certain areas.
   [Year-on-year change in net sales at existing stores in Japan]

	First quarter	Second quarter	Third quarter	Nine-month period
	(September to	under review
	(March to May)	(June to August)
	November)	(March to November)
Hotto Motto	106.6%	104.5%	103.9%	105.0%
YAYOI	113.7%	93.1%	88.4%	97.0%
MK RESTAURANTS	100.1%	67.9%	75.3%	77.0%

In overseas markets, we continued to face a challenging business environment due to restrictions, such as operating only takeout and delivery services or on shortened hours and/or having limits on the number of seats based on government orders in some countries and regions.

As a result of the above, the Company posted net sales of 106,994 million yen (up 1.9% year-on-year), operating profit of 3,239 million yen (186 million yen in the same period last year), ordinary profit of 6,305 million yen (up 856.7% year-on-year), and profit attributable to owners of parent of 3,456 million yen (net loss attributable to owners of parent of 931 million yen in the same period last year) for the nine-month period under review.

Net sales increased year-on-year due to higher net sales at existing stores of Hotto Motto year-on-year, despite a decrease in net sales due to lower net sales at existing stores of YAYOI and MK RESTAURANTS compared with the levels of a year before and to the transfer of directly managed Hotto Motto stores to franchised ones. Meanwhile, profits increased year-on-year due to an improved gross margin as a result of an increase in net sales at existing stores of Hotto Motto and promoting in-house production, etc.

The increase in ordinary profit was mainly due to posting 2,503 million yen in non-operating income for a subsidy for cooperation from a local government for shortening business hours to prevent the spread of infections and subsidies for employment adjustment as subsidy income.

[Status of store development in Japan]

	End of previous	Opening	Closing	End of third quarter	Renovation/Reloc
	fiscal year	under review	ation
Hotto Motto	2,493 stores	4 stores	9 stores	2,488 stores	6 stores
YAYOI	372 stores	1 store	-	373 stores	-
MK RESTAURANTS	26 stores	-	1 store	25 stores	-
Total	2,891 stores	5 stores	10 stores	2,886 stores	6 stores

- 2 -

[Status of store development outside Japan]

		End of previous			End of third
	Area	Opening	Closing	quarter under
	fiscal year
				review
	China	2 stores	-	1 store	1 store
Hotto Motto	South Korea	11 store	1 store	5 stores	7 stores
	Singapore	1 store	-	1 store	-
	Thailand	194 stores	4 stores	8 stores	190 stores
	Singapore	9 stores	1 store	1 store	9 stores
	Australia	6 stores	-	-	6 stores
YAYOI	Taiwan	21 store	1 store	1 store	21 store
USA	4 stores	-	1 store	3 stores
	Philippines	6 stores	1 store	-	7 stores
	Malaysia	4 stores	-	-	4 stores
	China	-	1 store	-	1 store
Total	-	258 stores	9 stores	18 stores	249 stores

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, Hotto Motto aims to provide bento boxes that are freshly made in stores by focusing on tasty meals and using carefully selected high-quality rice grown in Japan. We worked to provide high-value-added products, such as by promoting the use of the Group's plants, with the goal of increasing customer satisfaction.

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 79,666 million yen (up 2.1% year-on-year) and an operating profit of 5,504 million yen (up 87.4% year-on-year). Net sales increased year-on-year as a result of an increase in net sales at existing stores (up 5.0% year-on-year), despite a decrease in net sales due to the transfer of directly managed stores to franchised stores. Profits also increased year-on-year due to an increase in net sales at existing stores and improved gross margin.

[YAYOI Business]

Our basic policy is to offer set meals made with carefully selected ingredients and a home-made feel at reasonable prices, in addition to the conventional product measures for heavy users. Based on this, we continued to work to respond to a wide range of customer needs by expanding the breakfast menu and boosting demand for breakfasts through an increase in the number of stores offering the breakfast menu, as well as expanding the demand for takeouts by offering "At-Home Set Menu," which provides rice, soup, and side dishes in separate containers, so that customers can enjoy set meals at home, etc., in the same manner as at stores. We carried out campaigns on an ongoing basis.

As a result of the above, the Company posted net sales of 18,661 million yen (up 0.9% year-on-year) and an operating loss of 1,740 million yen (2,034 million yen in the same period last year). Net sales increased year-on-year as a result of an increase in net sales due to the transfer of franchise stores to directly managed ones, despite a decrease in net sales at existing stores (down 3.0% year-on-year). Profitability improved year-on-year as the magnitude of loss decreased due to an improvement in gross margin.

[MK RESTAURANTS Business]

We enhanced product capability by offering limited-time-only pot soups, such as "Iwashita's New Ginger Pot Soup" and "Iwashita's New Ginger Xiaolongbao," specially selected ingredients and dim sum (small Chinese dishes). In addition, we focused on driving customer visits by regularly implementing sales promotion initiatives targeting families. We also sought to respond to a wide range of customer needs by expanding the takeout menu and delivery services.

As a result of the above, the Company posted net sales of 1,374 million yen (down 17.4% year-on-year) and an operating loss of 255 million yen (265 million yen in the same period last year). Net sales fell year-on-year due to a decline in net sales at existing stores (down 23.0% year-on-year) and the closure of unprofitable stores last year. Meanwhile, in terms of profitability, the magnitude of loss decreased year-on-year, due to the closure of unprofitable stores executed during the previous year.

[Overseas Business]

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