Ito En : Financial Results Presentation for FY2021 3Q

Financial Results Presentation for FY2021 3Q

(Fiscal Year Ending April 30, 2022)

March 2022 ITO EN, LTD.

Copyright (C) All Rights Reserved. ITO EN, LTD.

Financial Results for FY2021 3Q

3Q（May 2021 to January 2022）

		FY2020	*Previous Standard	FY2021
		Results*	Sales	Results	Sales	YoY %
		Composition	Composition	Change
	Net Sales	338,641	100.0%	303,626	100.0%	*
	Gross Profit	161,138	47.6%	120,317	39.6%	*
	Sales Commission	56,828	16.8%	182	0.1%	*
	Advertising	7,943	2.3%	7,854	2.6%	-1.1%
Consolidated	Freight	10,573	3.1%	10,377	3.4%	-1.8%
Depreciation and	7,689	2.3%	6,944	2.3%	-9.7%
	Amortization
	Selling, General and	150,701	44.5%	106,206	35.0%	-29.5%
	Administrative Expenses
	Operating Income	10,436	3.1%	14,111	4.6%	35.2%
	Ordinary Income	10,240	3.0%	14,656	4.8%	43.1%
	Extraordinary Losses	-309	-	1,620	-	-
	and Income
	Net Income	5,754	1.7%	10,338	3.4%	79.7%
		FY2020	*Previous Standard	FY2021
		Results*	Sales	Results	Sales	YoY %
		Composition	Composition	Change
Consolidated-	Net Sales	268,458	100.0%	228,213	100.0%	*
Gross Profit	127,014	47.3%	85,789	37.6%	*
Non	Operating Income	9,688	3.6%	11,263	4.9%	16.3%
	Ordinary Income	10,936	4.1%	12,366	5.4%	13.1%

(Unit: million yen, thousand dollars / *Previous Standard)

Upper: Net Sales	FY2020	FY2021
Bottom: Operating Income	Results*	Results	YoY %
			Change

	Domestic		69,111		68,458	*
	Subsidiaries		88		2,094	2270.6%
		Tully's Coffee		19,454		22,652	*
		Japan Co., Ltd.		- 1,106		822	-
Subsidiaries		Chichiyasu		10,517		8,912	*
	Company		573		587	2.4%
	Overseas		26,098		30,735	17.8%
of	Subsidiaries		1,392		1,187	-14.7%
Performances				21,970		26,671	21.4%
		US		487		368	-24.5%
		Business	$	207,977	$	238,673	14.8%
			$	4,619	$	3,296	-28.6%
		Other Overseas		4,127		4,063	-1.5%
		Subsidiaries		904		819	-9.5%
	Elimination of		- 25,026		- 23,780	-
	Internal Transactions		- 732		- 434	-
		Exchange rate (US$)		105.64		111.75
		(3Q average rate)

*The revenue recognition standard has been applied since fiscal year 2021. A year- on-year change is not indicated for items that will be significantly impacted by this application.

Copyright (C) All Rights Reserved. ITO EN, LTD.

2

Financial Results for FY2021 3Q

(Reference) Year-on-year comparison based on Previous Standard

3Q（May 2021 to January 2022）

		FY2020	*Previous Standard	FY2021		*Previous Standard
		Results*	Sales	Results*	Sales	YoY %
		Composition	Composition	Change
	Net Sales	338,641	100.0%	349,727	100.0%	3.3%
	Gross Profit	161,138	47.6%	166,469	47.6%	3.3%
	Sales Commission	56,828	16.8%	59,068	16.9%	3.9%
	Advertising	7,943	2.3%	7,854	2.2%	-1.1%
Consolidated	Freight	10,573	3.1%	10,377	3.0%	-1.8%
Depreciation and	7,689	2.3%	6,944	2.0%	-9.7%
	Amortization
	Selling, General and	150,701	44.5%	152,401	43.6%	1.1%
	Administrative Expenses
	Operating Income	10,436	3.1%	14,068	4.0%	34.8%
	Ordinary Income	10,240	3.0%	14,613	4.2%	42.7%
	Extraordinary Losses	-309	-	1,620	-	-
	and Income
	Net Income	5,754	1.7%	10,310	2.9%	79.2%
		FY2020	*Previous Standard	FY2021		*Previous Standard
		Results*	Sales	Results*	Sales	YoY %
		Composition	Composition	Change
Consolidated-	Net Sales	268,458	100.0%	272,451	100.0%	1.5%
Gross Profit	127,014	47.3%	130,078	47.7%	2.4%
Non	Operating Income	9,688	3.6%	11,263	4.1%	16.3%
	Ordinary Income	10,936	4.1%	12,366	4.5%	13.1%

(Unit: million yen, thousand dollars / *Previous Standard)

Upper: Net Sales		FY2020		FY2021
Bottom: Operating Income		Results*		Results*	YoY %
							Change
	Domestic		69,111		71,014	2.8%
	Subsidiaries		88		2,051	2222.1%
		Tully's Coffee		19,454		22,609	16.2%
		Japan Co., Ltd.		- 1,106		780	-
Subsidiaries		Chichiyasu		10,517		10,109	-3.9%
	Company		573		587	2.4%
	Overseas		26,098		30,735	17.8%
of	Subsidiaries		1,392		1,187	-14.7%
Performances				21,970		26,671	21.4%
		US		487		368	-24.5%
		Business	$	207,977	$	238,673	14.8%
			$	4,619	$	3,296	-28.6%
		Other Overseas		4,127		4,063	-1.5%
		Subsidiaries		904		819	-9.5%
	Elimination of		- 25,026		- 24,474	-
	Internal Transactions		- 732		- 434	-
		Exchange rate (US$)		105.64		111.75
		(3Q average rate)

Copyright (C) All Rights Reserved. ITO EN, LTD.

3

Soft Drink Market in Japan and ITO EN

Monthly Sales Volume Trends

(％)

ITO EN

FY2020

FY2021

ITO EN (non-consolidated) for FY2021 3Q(May 2021 to Jan 2022)

20

12

(Unit: million yen)

8

6

10

3

17

1

2

-1

YoY

Results

0

-4

%Change

Sales composition

-7

-3

-1

Net Sales

272,451 ＋

2 ％

-10

-7

-7

-6

-20

-27

-12

-11

-12

-16

Tea Leaves

26,759 ＋

1 ％

-11

-30

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb

Mar Apr

Drinks

243,265 ＋

1 ％

Others

2,426 ＋ 30 ％

Tea Leaves Drinks

Others

*Source: ITO EN. May 2021 to Apr 2022

(％)

Market

FY2020

FY2021

*Previous standard

10%

89%

1%

30

(Unit: ten thousand case)

14

20

8

21

Drinks sales volume

FY 2020

FY 2021

3

4

Sales

YoY

Sales

YoY

10

6

2

by category

Results

Results

-1

Composition

%Change

Composition %Change

-5

0

-7

Drinks

16,568

100 ％ －

9 ％

16,496

100 ％ －

0 ％

-10

-2

-3

-22

-7

-8

-6

-7

Tea total

11,507

69 ％ －

9 ％

11,535

70 ％ ＋

0 ％

-20

-12

-12

-13-12

10,436

8 ％

10,736

3 ％

-30

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb

Mar Apr

Japanese Tea/Healthy Tea

63 ％ －

65 ％ ＋

*Source: ITO EN. May 2021 to Apr 2022

Chinese Tea

909

5 ％ － 15 ％

681

4 ％ － 25 ％

News Related to Soft Drink Market

Black Tea

162

1 ％ － 49 ％

117

1 ％ － 27 ％

2021

Jul

Early end of the rainy season in Japan.

Vegetable

2,487

15 ％ －

1 ％

2,226

13 ％ － 11 ％

1,113

9 ％

1,232

7 ％ ＋ 11 ％

Aug

The exceptionally long rainy season

Coffee

7 ％ －

brought a record amount of rainfall.

Mineral Water

495

3 ％ － 20 ％

506

3 ％ ＋

2 ％

Sep

State of emergency was extended. Weather

conditions were bad.

Carbonated

297

2 ％ － 16 ％

312

2 ％ ＋

5 ％

Nov Demand outside households increased

after the state of emergency was lifted.

Others

666

4 ％ － 20 ％

682

4 ％ ＋

2 ％

Dec

Crowds increased during year-end and New Year

Ratio of sugar-free beverages： 75 % or more

holidays.

2022

Jan

Stricter COVID-19 measures were implemented in

more areas due to the spread of Omicron.

Source: ITO EN

Copyright (C) All Rights Reserved. ITO EN, LTD.

4

Effects of COVID-19, etc.

Main impact on sales *3Q	1Q	2Q	3Q	4Q
( Nov 2021 to Jan 2022 )

ITO EN (non-consolidated)

( Nov 2021 to Jan 2022 )

+3.7%

Reference: Nov 2020 to Jan 2021 -9.1%

* Previous standard (YoY % )

The number of COVID-19 patients decreased significantly and consumer confidence was recovering.

• Crowds increased in reaction to decline that occurred in the previous year due to restraints on homecoming visits during the year-end and New Year holidays. Sales were on a rising trend in all businesses compared to the previous year.

Supermarket	Convenience Store	Vending Machine
+2%	+2%	+5%

Tully's Coffee Japan

( Nov 2021 to Jan 2022 )

+15%

Reference: Nov 2020 to Jan 2021 -21%

* Previous standard (YoY % )

The cafe market was on a recovery trend overall, partly due to increased crowds.

• Sales of the Happy Bag were strong partly due to the popularity of spending relaxing, cafe-style time at home.
• Many types of products featuring collaboration with Harry Hotter showed strong sales.

* Previous standard (YoY % )	Monthly Sales Volume Trends				Cafe market
					At the end of the
		(%)								Tully's Coffee Japan	month	November December	January
								20
			30		20			12		Ratio of shops that	0%	0%	0%
										suspended operations
			15										(Last year)	(1%)	(7%)	(1%)
												Ratio of shops that	17%	17%	52%
					5					15
										shortened business hours
			0										(Last year)	(17%)	(16%)	(60%)
				Nov	Dec 7		Jun
US Business ： ITO EN （North America） INC.		* Previous standard (YoY %) *Cafe market : :Japan Foodservice Association
( Nov 2021 to Jan 2022 )	+22 %	○	Sales were strong, but there is concern over pressure on profitability due to the
		confusion in ocean freight and domestic logistic situations.

Reference: Nov 2020 to Jan 2021

-2%

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