Plenus : Summary of Consolidated Financial Results for the Three Months Ended May 31, 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 Three Months Ended May 31, 2021 (Based on Japanese GAAP)

			July 9, 2021
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 Headquaters/IR Department Manager	Toshiyuki Fujinami	TEL: [phone]
Scheduled date to file Quarterly Securities Report:	July 13, 2021
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, 2021 (from March 1, 2021 to May 31, 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		%
Three months ended May 31, 2021	35,932	7.5	1,087	-	1,811		-		1,002		-
Three months ended May 31, 2020	33,423	(12.3)	(1,106)	-	(959)		-		(929)		-
(Note) Comprehensive income:	Three months ended May 31, 2021	1,076 million yen	(-%)
	Three months ended May 31, 2020	(941) million yen	(-%)
	Earnings per share	Diluted earnings per
	share
		Yen		Yen
Three months ended May 31, 2021		26.13		26.04
Three months ended May 31, 2020		(24.26)		-

(Notes) Diluted earnings per share for the three months ended May 31, 2020, are not stated, although there are dilutive shares because 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 May 31, 2021

80,662

51,791

63.1

Year ended February 28, 2021

80,389

51,867

63.4

(Reference) Shareholders' equity:

As of May 31, 2021

50,925 million yen

Year ended 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

-

Year ending February 28, 2022

30.00

-

30.00

60.00

(Forecast)

(Note) Revision of the dividends 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 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, 2021	72,610		6.5	2,290	-	2,780	-	1,540		-	40.16
(Cumulative)
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 three months ended May 31, 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

(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:	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 May 31, 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 May 31, 2021	6,012,805 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)
	Three months ended May 31, 2021	38,352,672 shares	Three months ended May 31, 2020	38,329,347 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 12, 2021 (Monday).

• Table of Contents of Attachments

1. Qualitative Information on Quarterly Financial Results under Review .................................................................	P. 2
(1)	Explanation of consolidated operating results................................................................................................	P. 2
(2)	Explanation of consolidated financial position ..............................................................................................	P. 4
(3)	Explanation of future forecast information such as consolidated financial results forecasts .........................	P. 4
2. Quarterly consolidated financial statements...........................................................................................................	P. 5
(1)	Consolidated balance sheets...........................................................................................................................	P. 5
(2)	Consolidated statements of income (year to date) and consolidated statements of comprehensive income (year
	to date) ...........................................................................................................................................................	P. 7
	Consolidated statements of income (year to date) .........................................................................................	P. 7
	(Three-month period).....................................................................................................................................	P. 7
	Consolidated statements of comprehensive income (year to date) ................................................................	P. 8
	(Three-month period).....................................................................................................................................	P. 8
(3)	Notes to quarterly consolidated financial statements .....................................................................................	P. 9
	(Notes regarding the going concern assumption)...........................................................................................	P. 9
	(Notes when there is a significant change in the amount of shareholders' equity) ........................................	P. 9
	(Adoption of special accounting procedures used in preparation of the quarterly consolidated financial
	statements) .....................................................................................................................................................	P. 9
	(Additional information) ................................................................................................................................	P. 9
	(Segment information) .................................................................................................................................	P. 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, 2021, the future outlook for the Japanese economy remained uncertain as consumption activities in Japan remained weak due to the impact of the spread of COVID-19, coupled with another rise in COVID-19 cases.
   The food services industry saw signs of a recovery in consumption activities after the lifting of the state of emergency that had been issued in January 2021, however it continues to face a challenging business environment, impacted by stay-at-home requests and requests to shorten business hours as a result of another state of emergency declared in 10 prefectures since April 2021. The meal placement industry remained strong thanks to increased demand for takeout and delivery on the back of COVID-19 infections and due to changes in consumer lifestyles. Meanwhile, competition is intensifying beyond business types with restaurants and diners entering into 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 promoted the expansion of 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 breakfast and takeout.
   With regards to domestic same-store sales during the three months ended May 31, 2021, Hotto Motto remained strong, increasing sales by 6.6%. Sales of YAYOI and MK RESTAURANTS increased year-on-year by 13.7% and 0.1%, respectively, however we continued to face a challenging business environment, impacted by stay-at-home requests and requests to shorten business hours in certain areas. In overseas markets, we continued to face a challenging business environment due to restrictions such as being forced to operate on shortened business hours and/or having limits on number of seats based on government orders in some countries and regions.
   As a result of the above, the Company posted net sales of 35,932 million yen (up 7.5% year-on-year), operating profit of 1,087 million yen (operating loss of 1,106 million yen in the same period last year), ordinary profit of 1,811 million yen (ordinary loss of 959 million yen in the same period last year), and profit attributable to owners of parent of 1,002 million yen (net loss attributable to owners of parent of 929 million yen in the same period last year) for the three-month period under review.
   Net sales rose year-on-year due to a year-on-year increase in same-store sales. Meanwhile, profits increased year-on-year due to improved gross margin as a result of promoting in-house production, etc., and an increase in net sales at existing stores. The increase in ordinary profit was mainly due to a subsidy for cooperation from local governments for shortening business hours to prevent the spread of infections recorded 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	2,493 stores	3 stores	5 stores	2,491 stores	2 stores
YAYOI	372 stores	1 store	-	373 stores	-
MK RESTAURANTS	26 stores	-	1 store	25 stores	-
Total	2,891 stores	4 stores	6 stores	2,889 stores	2 stores

[Status of store development outside Japan]

	Area	End of previous	Opening	Closing	End of first quarter
	fiscal year	under review
	China	2 stores	-	-	2 stores
Hotto Motto	South Korea	11 stores	1 store	1 store	11 stores
	Singapore	1 store	-	-	1 store
	Thailand	194 stores	-	2 stores	192 stores
	Singapore	9 stores	-	-	9 stores
	Australia	6 stores	-	-	6 stores
YAYOI	Taiwan	21 stores	1 store	1 store	21 stores
	USA	4 stores	-	-	4 stores
	Philippines	6 stores	-	-	6 stores
	Malaysia	4 stores	-	-	4 stores
Total	-	258 stores	2 stores	4 stores	256 stores

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

[Hotto Motto Business]

As a top brand of take-out 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 selling products such as "Double-Cheese Nori Bento" and "Garitaru Karaage Bento," which are variations of popular products targeting younger consumers, 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 26,742 million yen (up 4.0% year-on-year) and an operating profit of 1,730 million yen (up 165.0% year-on-year). Net sales rose year on year due to an increase in same-store sales (up 6.6% year-on-year). Profits also increased year-on-year due to an increase in net sales at existing stores and improved gross margin.

[YAYOI Business]

Based on the basic policy of offering set meals made with carefully selected ingredients and home-made feel at reasonable prices, in addition to the conventional product measures for heavy users, we continued to work to respond to a wide range of customer needs by expanding the breakfast menu and expanding the demand for breakfast through an increase in the number of stores offering the breakfast menu, as well as expanding the demand for takeout by offering "Home Set Meals," which provide 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, and we carried out campaigns on an ongoing basis.

As a result of the above, the Company posted net sales of 6,135 million yen (up 19.5% year-on-year) and an operating loss of 571 million yen (operating loss of 1,296 million yen in the same period last year). Net sales rose year-on-year due to an increase in same-store sales (up 13.7% 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 gross margin.

[MK RESTAURANTS Business]

We enhanced product capability by launching "Grated White Radish Pot Soup," which features refreshing grated white radish and salt broth that uses chicken stock soup made from the red chicken of Tamba, and offering specially selected ingredients for a limited time only, in addition to SHABU-SHABU (thinly sliced meat boiled with vegetables), a product that allows customers to choose from plenty of ingredients and unique soups. 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 take-out menu and delivery services.

As a result of the above, the Company posted net sales of 496 million yen (up 19.2% year-on-year) and an operating loss of 84 million yen (operating loss of 222 million yen in the same period last year). Net sales increased year-on-year due to an increase in net sales because of the impact caused by the spread of COVID-19, including temporary closure of some stores during the same period of the previous year, and an increase in net sales at existing stores (up 0.1% year-on-year). Meanwhile, in terms of profitability, the magnitude of loss decreased year-on-year due to the impact of the above and the closure of unprofitable stores executed during the previous year.

[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, we continued to face a challenging situation due to the impact of the spread of COVID-19 and associated restrictions, such as being forced to operate on shortened business hours and/or limiting the number of seats in some countries and regions.

As a result of the above, the Company posted net sales of 812 million yen (up 12.5% year-on-year) and an operating loss of 107 million yen (operating loss of 267 million yen in the same period last year).

[Other]

MSF Co., Ltd., whose main business is an OEM (original equipment manufacturer) 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 1,745 million yen (up 20.8% year-on-year). Regarding profits, the Company posted an operating profit of 128 million yen (up 257.3% year-on-year) as a result of an increase in production despite amortization of goodwill.

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