Kobe Bussan : Supplementary Material for FY2023 Q3 Financial Results

Supplementary Material for

FY2023 Q3 Financial Results

September 12, 2023

◤◤ Contents

⚫	Consolidated Financial Highlights	2
⚫	Gyomu Super Business	4
⚫ Outline of Gyomu Super Franchise Agreement	5
⚫ Changes in Total Number of Gyomu Super Stores	6
⚫ Year-on-year Changes in Product Shipments to Gyomu Super Stores	7
⚫ Kobe Bussan's Strengths: "Unique Products with Competitive Advantages"	8
⚫	Restaurant & Delicatessen Business	9
⚫ Eco Renewable Energy Business	13
⚫	Shareholder Returns	15
⚫	Consolidated Financial Forecast	16

1

◤◤ Consolidated Financial Highlights (Cumulative)

			Net Sales
350,000
300,000
250,000
					338,767
200,000					300,016
		259,362	267,374
150,000	220,351
100,000
FY19 Q3	FY20 Q3	FY21 Q3	FY22 Q3	FY23 Q3

				SG&A Expenses
25,000	9.4%																					10.0%
20,000					6.9%																8.0%
15,000																								6.0%
								4.2%		4.5%	4.7%
10,000	20,652	17,813																4.0%
										13,636	15,830
5,000									11,181						2.0%
0																								0.0%
FY19 Q3		FY20 Q3	FY21 Q3			FY22 Q3	FY23 Q3
						SG&A expenses						SG&A ratio

			Gross Profit
40,000	15.9%		14.1%															16.0%
				12.1%				11.8%	11.5%
35,000											12.0%
30,000																						8.0%
				36,493									35,484	39,109
	35,145
				32,410
25,000																4.0%
20,000																						0.0%
FY19 Q3	FY20 Q3	FY21 Q3	FY22 Q3	FY23 Q3
					Gross profit							Gross margin

							Operating Profit
25,000																								10.0%
					7.2%	7.9%			7.3%
20,000												6.9%	8.0%
6.6%
15,000																					6.0%
										21,228		21,847	23,278
10,000												4.0%
14,493		18,679
5,000																				2.0%
0																								0.0%
FY19 Q3	FY20 Q3	FY21 Q3		FY22 Q3	FY23 Q3
									Operating profit						Operating margin

Note: Fiscal year (FY) represents the one-year period from November 1 to October 31 of the following year.

2

◤◤ Consolidated Financial Highlights (Cumulative)

					Ordinary Profit
25,000																							10.0%
									8.3%		7.9%
							7.1%
20,000																			8.0%
6.6%																	6.7%
15,000																	6.0%
									22,205	23,638	22,694
10,000										4.0%
14,606		18,485
5,000																			2.0%
0																							0.0%
FY19 Q3	FY20 Q3	FY21 Q3		FY22 Q3	FY23 Q3
								Ordinary profit						Ordinary margin

	Profit Attributable to
20,000							Owners of Parent				8.0%
								5.6%	5.3%
15,000												6.0%
4.2%	4.5%										4.6%
10,000										4.0%
					11,656	14,883	15,932	15,590
5,000																		2.0%
9,292
0																					0.0%
				FY19 Q3	FY20 Q3	FY21 Q3	FY22 Q3	FY23 Q3
				Profit attributable to owners of parent						Net margin

[Financial Overview]

• Net sales
  Net sales increased by ¥38,750 million (12.9%) year on year with robust new store openings and continued strong product shipments to existing stores.
• Gross profit
  Gross profit increased by ¥ 3,625 million (10.2%) year on year due to the continued strong net sales despite the impact of the exchange rate fluctuations.
• SG&A expenses
  SG&A expenses increased by ¥2,193 million (16.1%) year on year due to increases in freight costs for the Gyomu Super Business and personnel and rent expenses resulting from the opening of our directly operated BBQ restaurants.
• Operating profit
  As a result of the factors above, operating profit increased by ¥1,431million (6.6%) year on year
• Ordinary profit
  Ordinary profit decreased by ¥944 million (4.0%) year on year due to a valuation loss on forward exchange contracts entered into to hedge the exchange rate fluctuation risk. While the valuation loss varies depending on the exchange rates at quarter-end, we expect the loss to be reduced by the end of FY2023.
• Profit attributable to owners of parent
  As a result of the factors above, profit attributable to owners of parent decreased by ¥342 million (2.1%) year on year.

3

◤◤ Gyomu Super Business

Gyomu Super is our core business. Operating results of this business segment reflect wholesale sales to, and royalty fee from, Gyomu Super franchisees earned by Kobe Bussan, a franchisor (franchising headquarters), as well as earnings of Kobe Bussan Group's plants.

• Gyomu Super stores have expanded nationwide with 1,032 stores as of July 31, 2023.
• Net sales for FY2023 Q3 exceeded the planned amount due to strong performance of the existing stores.
• We have also revised prices for some of the imported private label items, given the weakening yen since this spring.

			Net Sales (cumulative)
350,000
300,000
250,000
200,000
														328,067
150,000
								262,749			292,602
							239,825
100,000		193,895
50,000
0
FY19 Q3	FY20 Q3	FY21 Q3	FY22 Q3	FY23 Q3

Operating Profit (cumulative)

30,000						10.0%
25,000		8.5%	9.1%			9.0%
8.2%		8.4%	7.8%
20,000						8.0%
15,000						7.0%
10,000		20,316	23,925			6.0%
15,810
			24,432
5,000					25,550	5.0%
0						4.0%
	FY19 Q3	FY20 Q3	FY21 Q3	FY22 Q3	FY23 Q3
		Operating profit	Operating margin

Note: Due to a change in the reportable segment structure in FY2021, the figures for FY2020 are reclassified retrospectively to reflect the change.	4
Accordingly, the figures for these four years are not consistent with that for FY2019.