Demae-Can / 2484

Demae-can / 2484

COVERAGE INITIATED ON: 2017.12.25 LAST UPDATE: 2021.03.01

Shared Research Inc. has produced this report by request from the company discussed herein. The aim is to provide an “owner’s manual” to investors. We at Shared Research Inc. make every effort to provide an accurate, objective, neutral analysis. To highlight any biases, we clearly attribute our data and findings. We always present opinions from company management as such. The views are ours where stated. We do not try to convince or influence, only inform. We appreciate your suggestions and feedback. Write to us at [email protected] or find us on Bloomberg.

Research Coverage Report by Shared Research Inc. Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

INDEX

How to read a Shared Research report: This report begins with the Trends and outlook section, which discusses the company’s most recent earnings. First-time readers should start at the later Business section.

Executive summary ------3 Key financial data ------5 Recent updates ------6 Highlights ------6 Trends and outlook ------7 Quarterly trends and results ------7 Company forecast for FY08/21 ------13 Historical forecast accuracy ------13 Medium-term business plan ------14 Business ------19 Business description ------19 Demae-can business ------20 Mail Order business ------27 Group companies ------28 Market overview ------29 Information on competitors ------32 Strengths and weaknesses ------33 Historical performance ------35 Income statement ------35 Balance sheet ------37 Cash flow statement ------39 Other information ------40 ESG-related ------40 Shareholder returns------40 Top management ------41 Major shareholders (as of August 31, 2020) ------42 Employees ------42 Historical performance, news and topics ------43 Historical performance ------43 News and topics ------61 Profile ------66

02/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Executive summary

Business overview

◤ Demae-can business: The company operates Demae-can, a food delivery website for restaurants. Under its Demae-can business, the company operates a dedicated online platform through which consumers looking for speedy home delivery service (in as little as 20 minutes) can order food from affiliated restaurants. The company offers an outsourced delivery platform, Sharing Delivery, for restaurants without their own delivery infrastructure. Since Q3 FY08/20, amid a tough climate for the restaurant industry due to the COVID-19 outbreak, the company has grown revenue sharply by responding to demand for delivery from restaurants and consumers (revenue was up 73.3% YoY in Q3 and 91.5% YoY in Q4). At the same time, the company incurred upfront spending, such as the expense of setting up delivery bases (Sharing Delivery bases) and advertising. In FY08/20, it reported gross merchandise volume (GMV) of JPY102.7bn (+31.0% YoY), revenue of JPY10.3bn (+54.6% YoY), and an operating loss of JPY2.6bn (an operating loss of JPY39mn in FY08/19). The Demae-can business reported revenue of JPY9.4bn (+73.8% YoY) and an operating loss of JPY2.5bn (an operating loss of JPY18mn in FY08/19). The company only operated in Japan as of FY08/20.

◤ Outsourced delivery platform (Sharing Delivery): It is moving forward with a hybrid system in which it secures delivery infrastructure by establishing delivery bases (Sharing Delivery bases) while outsourcing deliveries to companies and individuals during peak hours to suppress fixed costs. The company manages its Sharing Delivery bases directly and in partnership with other companies. It distinguishes itself with efficient, quality delivery services that set it apart from its main competitor Uber Technologies, Inc. (NYSE: UBER). The company had 384 bases as of end-FY08/20 (an increase of 169 YoY), and said it covered roughly 30% of the population.

◤ Key Performance Indicators: The company discloses three key performance indicators that it watches closely: gross merchandise volume (GMV: JPY102.7bn in FY08/20, +31.5% YoY), the number of affiliated restaurants (33,000, +65.7% YoY), and the number of active users (3.92mn, +30.7% YoY), defined as users who have made an order within the past year. The company’s strategy entails first growing the number of affiliated restaurants, resulting in higher GMV and more active users, and thereby increasing density, boosting delivery efficiency. Key indicators that the company watches closely but does not disclose include its order conversion rate (the percent of website viewers that place orders), number of orders, order unit price, and repeat order rate.

◤ Revenue: As of January 2021, in principle, pay-for-use charges for affiliated restaurants were 10% of order cost as Demae-can service fees (before tax, including points cost); 25% of order cost as delivery commissions (before tax; no charge when affiliated restaurants handle delivery); and maximum of 3% of order value as payment processing fees (before tax; for cashless payments, fees paid to credit card company). The company wants to make restaurant food deliveries an everyday occurrence, and thinks this will see the average order decline gradually from about JPY2,800 in August 2020. The company said this is due to a tendency for average order value to decline for high-frequency customers, and its plans to tap into the singles demographic in addition to families.

◤ Strengthening of capital and business alliance with LINE Corp. (unlisted): In March 2020, the company announced that it had entered into an agreement to strengthen its capital and business alliance with the LINE group. With the strengthening of the ties between the two companies, going forward, Demae-can will be drawing upon the management resources of the LINE group in a number of different ways, including (1) making use of LINE’s LINE ID service, (2) procuring funding for growth-oriented investments, (3) procuring additional personnel from LINE to help with systems development work and marketing, and (4) receiving support that enables the expansion of its takeout food delivery service into new territories. By combining its own ID system with LINE ID to create a new ID system known as “ONE ID,” Demae-can hopes to make it easy for the more than 84mn LINE users to make use of its takeout food delivery service. With the JPY30bn in new equity capital it will receive from the issuance of new shares, Demae-can will have the funds to finance spending on systems development work, establish more delivery bases, and step up its marketing. In additional to the financial backing from LINE, Demae-can will also be able to draw upon LINE’s human resources to help with systems development and marketing. Furthermore, because LINE operates its own takeout food delivery service (under the name Pockeo), Demae-can is also expecting to generate synergies as it merges the operations of the delivery service operated by LINE with its own operations.

03/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

LINE This communication app commenced service in June 2011. In addition to one-on-one and group chat functions (like WhatsApp), LINE offers free telephony, and via a news tab the app disseminates breaking news, weather, fortune telling, and rail transit information. The LINE app can also be used for payments, delivery, shopping, manga, and other services. As of end-September 2020, LINE reported a total of 86mn active domestic users per month, with 85% of these being daily active users.

Trends and outlook

◤ FY08/20 results: The company reported gross merchandise volume (GMV) of JPY102.7bn (+31.0% YoY), revenue of JPY10.3bn (+54.6% YoY), an operating loss of JPY2.6bn (versus loss of JPY39mn in FY08/19), a recurring loss of JPY2.9bn (versus loss of JPY7mn in FY08/19), and a net loss attributable to owners of the parent of JPY4.1bn (versus loss of JPY103mn in FY08/19). Profits were significantly lower YoY due to investment to expand the market share of the Demae-can business. Further, the company booked an impairment loss of JPY1.2bn in the Demae-can business upon reviewing recoverability of assets based on the new medium-term management plan and in consideration of business environments going forward.

◤ FY08/21 forecast: The company forecasts full-year GMV of JPY160.0bn (+56.0% YoY), revenue of JPY28.0bn (+171.7% YoY), an operating loss of JPY13.0bn (versus loss of JPY2.6bn in FY08/20), a recurring loss of 13.0bn (versus loss of JPY2.9bn), and a net loss attributable to owners of the parent of JPY13.0bn (versus loss of JPY4.1bn in FY08/20). The company sees FY08/21 as a period to prioritize investments to build the foundation of its business and plans to move forward with substantial investments. Additionally, it left its dividend forecast undetermined.

◤ Medium-term business plan: On March 26, 2020, the company announced that it had entered a business and capital alliance agreement with LINE Corp. (unlisted), and that it had also signed a separate agreement under which LINE Corp. and Mirai Fund Limited Liability Partnership had pledged to underwrite the company’s issuance of new shares through third-party allotment, which in turn would lead to changes in the company’s principal shareholder and controlling company. With the conclusion of these agreements, the company created a new medium-term management plan spanning the three-year period from FY08/21 to FY08/23 on October 15, 2020. The company forecasts GMV of JPY250.0bn (+56.0% YoY), revenue of JPY60.0bn, and an operating loss of JPY2.0bn for FY08/22, and GMV of JPY340.0bn (+36.0% YoY), revenue of JPY97.0bn, and operating profit of JPY12.0bn for FY08/23. The company plans to make major investments in growing the Demae-can business in FY08/21, turn the Demae-can website profitable excluding Sharing Delivery losses in FY08/22, and have the Sharing Delivery business post a full-year profit in FY08/23. Under its medium-term plan, the company aims to make food delivery an everyday occurrence.

Strengths and weaknesses

Shared Research sees the company as having three key strengths: 1) strengthening capital/business alliance with LINE group allows Demae-can to draw on its management resources as well, 2) delivery bases (Sharing Delivery bases) expand coverage and boost service efficiency and quality, and 3) strong brand recognition. In terms of weaknesses, we see 1) heavy investment needed to establish delivery bases (Sharing Delivery bases), 2) low customer acquisition and service efficiency due to low repeat order rate, and 3) company strengths difficult to leverage overseas.

04/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Key financial data

Income statement FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 FY08/21 (JPYmn) Parent Parent Parent Parent Parent Parent Parent Cons. Cons. Cons.Cons. Est. Revenue 1,259 1,360 2,087 3,558 3,661 4,155 4,944 5,431 6,666 10,306 28,000 YoY 8.8% 8.0% 53.5% 70.5% 2.9% 13.5% 19.0% 9.8% 22.7% 54.6% 171.7% Gross profit 957 960 1,328 2,040 2,286 2,652 3,223 3,410 4,196 7,283 YoY 7.1% 0.3% 38.3% 53.6% 12.1% 16.0% 21.5% 5.8% 23.0% 73.5% Gross profit margin 76.0% 70.6% 63.6% 57.3% 62.4% 63.8% 65.2% 62.8% 63.0% 70.7% Operating profit 244 211 278 362 547 573 801 837 -39 -2,623 -13,000 YoY 4.5% -13.7% 32.2% 30.0% 51.1% 4.8% 39.8% 4.6% - - - Operating profit margin 19.4% 15.5% 13.3% 10.2% 14.9% 13.8% 16.2% 15.4% --- Recurring profit 260 221 275 366 541 579 798 849 -7 -2,920 -13,000 YoY 8.7% -15.2% 24.5% 33.1% 48.1% 7.0% 37.8% 6.4% - - - Recurring pofit margin 20.6% 16.2% 13.2% 10.3% 14.8% 13.9% 16.1% 15.6% - -- Net income 146 115 97 167 97 348 433 559 -103 -4,112 -13,000 YoY 18.7% -21.2% -16.0% 73.1% -42.0% 258.4% 24.4% 29.1% - - - Net margin 11.6% 8.5% 4.6% 4.7% 2.6% 8.4% 8.8% 10.3% - - - Per-share data (split-adjusted; JPY) Shares issued (year-end; '000) 55 55 5,549 11,098 11,098 11,098 44,390 44,390 44,391 85,487 EPS 2,828.8 2,228.0 18.8 17.1 9.7 34.5 10.7 13.8 -2.5 -73.9 -158.1 EPS (fully diluted) 2,801.5 2,196.0 18.3 16.7 9.6 33.4 10.3 13.5 - - Dividend per share 1,150.0 700.0 8.0 5.0 7.0 10.0 3.3 3.6 3.6 - - Book value per share 40,678 41,995 414 203 212 230 67 80 69 364 Balance sheet (JPYmn) Cash and cash equivalents 792 651 1,258 1,200 1,372 1,720 2,263 2,928 2,186 28,966 Total current assets 1,032 879 1,650 1,659 1,938 2,578 3,520 5,293 5,556 35,580 Tangible fixed assets 20 11 42 55 83 109 79 123 162 51 Investments and other assets 749 880 322 516 435 288 320 499 545 344 Intangible fixed assets 504 588 948 778 651 1,092 521 604 822 10 Total assets 2,305 2,357 2,962 3,007 3,107 4,066 4,439 6,519 7,084 35,986 Short-term debt - - 101 107 105 207 75 804 804 - Total current liabilities 191 160 579 687 751 1,332 1,698 3,165 4,203 7,462 Long-term debt - - 376 280 188 341 8 4 - - Total fixed liabilities - - 396 300 211 392 28 69 41 44 Total liabilities 191 160 976 986 962 1,724 1,726 3,233 4,244 7,506 Shareholders' equity 2,099 2,183 1,986 2,010 2,137 2,317 2,698 3,256 2,819 28,477 Net assets 2,114 2,197 1,987 2,021 2,146 2,342 2,713 3,269 2,840 28,480 Total interest-bearing debt - - 476 387 293 548 83 808 804 - Cash flow statement (JPYmn) Cash flows from operating activities 249 259 318 481 594 673 1,045 433 98 -1,499 Cash flows from investing activities 186 -354 207 -391 -313 -145 -298 -353 -501 -449 Cash flows from financing activities -46 -46 72 -170 -106 -194 -205 591 -339 28,729 Financial ratios ROA (RP-based) 11.8% 9.5% 10.3% 12.2% 17.7% 16.1% 18.8% 15.5% -0.1% -13.6% ROE 7.1% 5.4% 4.6% 8.4% 4.7% 15.6% 17.3% 18.8% -3.4% -26.3% Financial leverage (equity multiplier) 1.1 1.1 1.3 1.5 1.5 1.6 1.7 1.8 2.2 1.4 Total asset turnover 0.6 0.6 0.8 1.2 1.2 1.2 1.2 1.0 1.0 0.5 Net margin 11.6% 8.5% 4.6% 4.7% 2.6% 8.4% 8.8% 10.3% -1.5% -39.9% Source: Shared Research based on company data

05/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Recent updates

Highlights

On March 1, 2021, Demae-can Co., Ltd. announced a change in the parent company.

The company announced that NAVER Corp. (KRX: 035420), its parent company, was no longer its parent as of the same day. Due to the business integration of the company’s major shareholder LINE Corp. and Z Holdings Corp. (TSE1: 4689) taking effect on the same day (business integration was announced on December 23, 2019), the parent company of LINE was changed from NAVER to Z Holdings. There has been no change in major shareholders due to this change, and no new company is classified as a parent company.

▷ The company said this change would have no impact on its earnings performance. ▷ The number of voting rights NAVER indirectly owns after the change (as of March 1, 2021) is 205,480 units (25.0% of all voting rights). Prior to the change, the number was 499,760 units (60.9%).

On January 22, 2021, Shared Research updated the report following interviews with the company.

On December 24, 2020, the company announced earnings results for Q1 FY08/21; see the results section for details.

For previous releases and developments, please refer to the News and topics section.

06/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Trends and outlook Quarterly trends and results

Cumulative FY08/19 FY08/20 FY08/21 FY08/21 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1% of Est.FY Est. Revenue 1,434 3,120 4,847 6,666 1,817 3,829 6,823 10,306 4,228 15.1% 28,000 YoY 18.8% 21.4% 21.0% 22.7% 26.8% 22.7% 40.8% 54.6% 132.7% 171.7% Gross profit 888 1,926 2,969 4,196 1,128 2,538 4,756 7,283 2,525 YoY 15.4% 17.1% 17.5% 23.0% 27.0% 31.8% 60.2% 73.5% 123.9% Gross profit margin 62.0% 61.7% 61.3% 63.0% 62.1% 66.3% 69.7% 70.7% 59.7% SG&A expenses 786 1,966 2,945 4,236 1,338 3,527 6,365 9,906 5,719 YoY 39.4% 50.8% 49.8% 64.6% 70.4% 79.4% 116.1% 133.9% 327.4% SG&A ratio 54.8% 63.0% 60.8% 63.5% 73.6% 92.1% 93.3% 96.1% 135.3% Operating profit 103 -40 24 -39 -210 -989 -1,609 -2,623 -3,194 - -13,000 YoY -50.1%--95.7%------Operating profit margin 7.2%-0.5%------Recurring profit 112 -19 55 -7 -202 -966 -1,918 -2,920 -3,195 - -13,000 YoY -46.8%--90.5%------Recurring profit margin 7.8%-1.1%------Net income 92 -33 -7 -103 -221 -905 -1,878 -4,112 -3,544 - -13,000 YoY -35.4%------Net margin 6.4%------Quarterly FY08/19 FY08/20 FY08/21 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1 Revenue 1,434 1,686 1,728 1,819 1,817 2,011 2,994 3,484 4,228 YoY 18.8% 23.8% 20.3% 27.6% 26.8% 19.3% 73.3% 91.5% 132.7% Gross profit 888 1,037 1,043 1,227 1,128 1,410 2,218 2,527 2,525 YoY 15.4% 18.5% 18.3% 38.8% 27.0% 35.9% 112.5% 105.9% 123.9% Gross profit margin 62.0% 61.5% 60.4% 67.5% 62.1% 70.1% 74.1% 72.5% 59.7% SG&A expenses 786 1,180 979 1,290 1,338 2,189 2,837 3,541 5,719 YoY 39.4% 59.5% 47.9% 112.5% 70.4% 85.5% 189.7% 174.4% 327.4% SG&A ratio 54.8% 70.0% 56.7% 70.9% 73.6% 108.8% 94.8% 101.7% 135.3% Operating profit 103 -143 64 -63 -210 -779 -620 -1,014 -3,194 YoY -50.1%--70.8%------Operating profit margin 7.2%-3.7%------Recurring profit 112 -131 74 -62 -202 -764 -951 -1,002 -3,195 YoY -46.8%--67.4%------Recurring profit margin 7.8%-4.3%------Net income 92 -125 27 -97 -221 -684 -973 -2,235 -3,544 YoY -35.4%--83.7%------Net margin 6.4%-1.5%------Source: Shared Research based on company data

07/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Q1 FY08/21 results Overview

▷ In Q1 FY08/21, the company reported revenue of JPY4.2bn (+132.7% YoY), an operating loss of JPY3.2bn (versus loss of JPY210mn in Q1 FY08/20), a recurring loss of JPY3.2bn (versus loss of JPY202mn in Q1 FY08/20), and a net loss attributable to owners of the parent of JPY3.5bn (versus loss of JPY221mn in Q1 FY08/20). Profits were significantly lower YoY in line with plan due to investment to expand the market share of the Demae-can business. ▷ Demae-can business: The mainstay Demae-can business posted Q1 revenue of JPY4.0bn (+167.3% YoY) and an operating loss of JPY3.2bn (versus loss of JPY183mn in Q1 FY08/20). In Q1, KPIs for the business were as follows: gross merchandise volume (GMV) JPY30.7bn (+58% YoY), the number of active users 4.7mn (+51.9% YoY), and the number of affiliated restaurants 45,000 (+117.2% YoY). The number of affiliated restaurants reached 50,000 as of December 24, 2020, achieving the target set for end-December 2020 in the medium-term business plan. Sharing Delivery covered 34% (+4pp versus end-FY08/20) of the population. ▷ Full-year FY08/21 forecast: The company made no change to the initial earnings forecast announced on October 15, 2020. In Q1, progress versus the full-year forecast was 15.1% for revenue.

Performance by segment By segment FY08/19 FY08/20 FY08/21 Cumulative (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Revenue 1,434 3,120 4,847 6,666 1,817 3,829 6,823 10,306 4,228 YoY 18.8% 21.4% 21.0% 22.7% 26.8% 22.7% 40.8% 54.6% 132.7% Demae-can 1,117 2,462 3,867 5,395 1,510 3,216 6,075 9,375 4,037 YoY 30.0% 31.1% 29.9% 32.3% 35.2% 30.6% 57.1% 73.8% 167.3% Basic operating fees - - 2,736 3,744 958 - 3,796 5,725 2,008 YoY ------38.7% 52.9% 109.7% Order processing fees - - 141 326 217 - 1,302 2,324 1,670 YoY ------821.7% 613.5% 668.8% Other - - 989 1,325 335 - 977 1,326 359 YoY ------1.3%0.1%7.1% Mail Order 317 657 980 1,271 307 613 748 931 192 YoY -8.9% -4.8% -4.5% -6.1% -3.1% -6.7% -23.7% -26.7% -37.7% Adjustments -54 -120 -190 -265 -64 -143 -253 -410 -143 Operating profit 103 -40 24 -39 -210 -989 -1,609 -2,623 -3,194 YoY -50.1%--95.7%------Operating profit margin 7.2%-0.5%------Demae-can 114 -33 31 -18 -183 -936 -1,486 -2,456 -3,205 YoY -48.6%--94.8%------Operating profit margin 10.2% -1.3% 0.8% -0.3% -12.1% -29.1% -24.5% -26.2% -79.4% Mail Order 42 106 170 224 45 98 111 155 18 YoY -13.7% -1.6% 4.0% 2.8% 7.8% -6.9% -34.6% -31.0% -60.9% Operating profit margin 13.3% 16.1% 17.4% 17.6% 14.8% 16.1% 14.9% 16.6% 9.3% Adjustments -53 -113 -177 -246 -73 -151 -234 -322 -7 By segment FY08/19 FY08/20 FY08/21 Quarterly (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1 Revenue 1,434 1,686 1,728 1,819 1,817 2,011 2,994 3,484 4,228 YoY 18.8% 23.8% 20.3% 27.6% 26.8% 19.3% 73.3% 91.5% 132.7% Demae-can 1,117 1,346 1,405 1,528 1,510 1,706 2,859 3,300 4,037 YoY 30.0% 32.0% 27.7% 38.9% 35.2% 26.7% 103.6% 115.9% 167.3% Mail Order 317 340 323 291 307 306 135 183 192 YoY -8.9% -0.7% -3.9% -10.8% -3.1% -10.2% -58.2% -37.0% -37.7% Adjustments -54 -66 -70 -76 -64 -78 -110 -158 -143 Operating profit 103 -143 64 -63 -210 -779 -620 -1,014 -3,194 YoY -50.1%--70.8%------Operating profit margin 7.2%-3.7%------Demae-can 114 -147 64 -48 -183 -754 -550 -970 -3,205 YoY -48.6%--71.9%------Operating profit margin 10.2% -10.9% 4.5% -3.2% -12.1% -44.2% -19.2% -29.4% -79.4% Mail Order 42 64 64 54 45 53 13 43 18 YoY -13.7% 8.5% 14.7% -1.0% 7.8% -16.6% -80.1% -19.8% -60.9% Operating profit margin 13.3% 18.7% 19.9% 18.6% 14.8% 17.4% 9.5% 23.7% 9.3% Adjustments -53 -60 -64 -69 -73 -79 -82 -88 -7 Source: Shared Research based on company data Note: Disclosure classifications for consolidated revenue in the Demae-can business changed in cumulative Q3 FY08/20 accompanying changes in its fee structure. The above figures show only figures after the classification change.

08/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Demae-can business In Q1, the mainstay Demae-can business reported revenue of JPY4.0bn (+167.3% YoY) and an operating loss of JPY3.2bn (versus loss of JPY183mn in Q1 FY08/20).

▷ Disclosure classifications for consolidated revenue in the Demae-can business changed in Q3 FY08/20 accompanying changes in its fee structure. In Q1 FY08/21, revenue broke down to Demae-can service fees JPY2.0bn (+109.7% YoY), delivery commissions JPY1.7bn (+668.8% YoY), and other JPY359mn (+7.1% YoY). ▷ In Q1, KPIs for the Demae-can business were as follows: gross merchandise volume (GMV) JPY30.7bn (+58% YoY), the number of active users 4.7mn (+51.9% YoY), and the number of affiliated restaurants 45,000 (+117.2% YoY). The number of affiliated restaurants reached 50,000 as of December 24, 2020, achieving the target set for end-December 2020 in the medium-term business plan. The company’s strategy entails first growing the number of affiliated restaurants, resulting in higher GMV and more active users, and thereby increasing density, boosting delivery efficiency. The company considers growing the number of affiliated restaurants as essential in the first half of the medium-term management plan because the metric is the basis for achieving the other KPIs. We understand that the company is making steady progress in its medium-term management plan as of January 2021. Sharing Delivery covered 34% of the population (+4pp versus end-08/20). Many of the new affiliated restaurants are using Sharing Delivery, and the company anticipates expansion in the delivery platform moving forward. ▷ Since GMV grew slightly faster than the number of active users, the company believes the increase in new active users drove Q1 GMV growth, supported by a small increase in repeat orders from existing active users. Demae-can says the increase in active users is in part explained by initiatives aimed at increasing consumer awareness that the company has been pursuing for some time, in addition to the decision to link with users’ LINE IDs that was implemented on November 10, 2020 (1,000,000

accounts linked as of end-November). The company plans to gradually shift from measures aimed at acquiring new active users to those targeting a higher repeat order rate so that GMV growth will follow growth in the number of active users. ▷ The numbers of orders and delivery bases (Sharing Delivery bases) were disclosed in previous quarterly earnings briefings, but were not disclosed in Q1. The company has decided to disclose GMV and Sharing Delivery’s population coverage rate, which are KPIs in the medium-term management plan announced in October 2020. The company explains that the gap between the CAGR of gross merchandise volume and the CAGR of the number of orders tends to be small.

Key performance indicators (KPIs) Key performance indicators FY08/19 FY08/20 FY08/21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Cumulative GMV (JPYmn) - - - - 19,433 - - 102,700 30,700 YoY ------58.0% Quarterly GMV (JPYmn) ----19,433---30,700 YoY ------58.0% QoQ ------Number of affiliated stores 17,834 18,572 19,452 19,911 20,720 21,450 24,000 33,000 45,000 QoQ change 627 738 880 459 809 730 2,550 9,000 12,000 YoY 13.5% 15.5% 18.3% 15.7% 16.2% 15.5% 23.4% 65.7% 117.2% QoQ 3.6% 4.1% 4.7% 2.4% 4.1% 3.5% 11.9% 37.5% 36.4% Number of active users (mn) 2.74 2.82 2.90 3.00 3.10 3.20 3.70 3.92 4.71 QoQ change 0.050.080.080.100.100.100.500.220.79 YoY 11.8% 10.6% 10.7% 11.5% 13.1% 13.5% 27.6% 30.7% 51.9% QoQ 1.9% 2.9% 2.8% 3.4% 3.3% 3.2% 15.6% 5.9% 20.2% Key performance indicators FY08/19 FY08/20 FY08/21 Quarterly Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 GMV per active user (JPY) ----6,372---7,115 YoY ------QoQ ------GMV per affiliate store (JPYmn) - - - - 0.96 - - - 0.79 YoY ------QoQ ------Source: Shared Research based on company data Note: GMV per active user and GMV per affiliated restaurant were calculated based on averages for active users and affiliated restaurants determined by the start and end figures for each quarter.

09/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

For the number of orders and Sharing Delivery bases, which the company disclosed through FY08/20, see “Interpreting disclosed data” under the Business section.

Situation in January 2021 and beyond

▷ In January 2021, the company reduced the delivery commission from 30% to 25% (until December 2020, it was 23% for a limited time). Demae-can reduced the commission to a level that is easy for affiliated restaurants to accept in consideration of the uncertainty about when the COVID-19 pandemic will end and high delivery demand. The company says it factored in this reduction when formulating the medium-term management plan. It also says the lower commission level is profitable. While it is possible the company will implement further reductions in the delivery commission in certain cases, it does not plan to lower the commission for the purpose of competing with new entrants who set low commissions as long as can secure a certain transaction volume per restaurant. This is because part of the value of Demae-can’s platform is its ability to attract customers to and increase consumer recognition of affiliated restaurants. ▷ The company said delivery bases (Sharing Delivery bases) were necessary to maintain delivery quality as it grew, but that there would be several other options in the future to achieve the same goal. For example, the company has begun outsourcing work to individuals and corporations in January 2021. It is moving forward with a hybrid system in which it secures delivery infrastructure by establishing delivery bases (Sharing Delivery bases) while outsourcing deliveries to companies and individuals

during peak hours to suppress fixed costs. Outsourcing to individuals requires them to have a vehicle (motorcycle, bicycle, or car) and smartphone. Compensation per delivery is fixed (there are incentives for volume). The company says it ensures quality on the delivery front by conducting online interviews and having workers participate in online information sessions. Further, in

response to the reissuance of the state of emergency declaration, Demae-can launched a support campaign for individual contractors that provides special incentives if certain conditions are met. It also announced it would expand work-sharing (for companies and individuals) with companies that have excess personnel due to business contraction. ▷ The company plans to strengthen its appeal to young people in 2021. By increasing the number of affiliated restaurants and improving the lineup of food offerings appealing to young people, Demae-can has laid the necessary groundwork for acquiring young users. It has been airing new TV commercials targeting young people since December 2020. ▷ In 2021, the company plans to enhance personalization and usability of the interface. It also plans to improve delivery efficiency by combining deliveries from the same restaurant that are headed in the same direction, combining deliveries of multiple neighboring restaurants, and improving routing accuracy from restaurants to users.

Mail Order business In Q1, the Mail order business reported revenue of JPY192mn (-37.7% YoY) and operating profit of JPY18mn (-60.9% YoY). The business was affected by the decline in restaurant operations due to the COVID-19 pandemic.

Reference: Comparable overseas companies

In Japan, direct competitor Uber Eats (Japanese operations) is not listed and Rakuten Delivery is part of Rakuten (TSE1: 4755), so data are difficult to obtain. We have included information on comparable overseas companies here for reference.

10/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Uber Technologies, Inc. (Delivery segment) Uber Technologies, Inc. FY12/18 FY12/19 FY12/20 (USDmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Delivery revenue 283 346 394 437 536 595 645 734 819 1,211 1,451 YoY 241.0% 186.0% 141.7% 98.6% 89.4% 72.0% 63.7% 68.0% 52.8% 103.5% 125.0% QoQ 28.6% 22.3% 13.9% 10.9% 22.7% 11.0% 8.4% 13.8% 11.6% 47.9% 19.8% Excess driver incentives 97 124 200 266 291 253 247 315 292 326 315 YoY 106.4% 195.2% 284.6% 285.5% 200.0% 104.0% 23.5% 18.4% 0.3% 28.9% 27.5% QoQ 40.6% 27.8% 61.3% 33.0% 9.4% -13.1% -2.4% 27.5% -7.3% 11.6% -3.4% % of delivery revenue 34.3% 35.8% 50.8% 60.9% 54.3% 42.5% 38.3% 42.9% 35.7% 26.9% 21.7% Driver referrals 323665642 -1 YoY 0.0% -50.0% -25.0% -86.0% 100.0% 150.0% 100.0% -33.3% -66.7% - -83.3% QoQ -93.0% -33.3% 50.0% 100.0% 0.0% -16.7% 20.0% -33.3% -50.0% - - % of delivery revenue 3.1% 1.6% 1.5% 2.3% 2.1% 2.0% 2.4% 1.3% 0.7% 0.0% 0.3% Delivery adjusted net revenue 183 220 191 165 239 337 392 415 527 885 1,135 YoY 454.5% 193.3% 78.5% 11.5% 30.6% 53.2% 105.2% 151.5% 120.5% 162.6% 189.5% QoQ 23.6% 20.2% -13.2% -13.6% 44.8% 41.0% 16.3% 5.9% 27.0% 67.9% 28.2% % of delivery revenue 64.7% 63.6% 48.5% 37.8% 44.6% 56.6% 60.8% 56.5% 64.3% 73.1% 78.2% Delivery adjusted EBITDA - -84 -189 -278 -309 -286 -316 -461 -313 -232 -183 YoY ------QoQ ------% of delivery revenue ------Source: Shared Research based on publicly disclosed data

Just Eat Takeaway.com N.V. Just Eat Takeaway.com N.V. FY12/18 FY12/19 FY12/20 (EURmn) H2H1H2H1 Revenue - 715 842 1,031 YoY ---44.2% HoH - - 17.8% 22.4% Cost of sales - 243 305 401 YoY ---65.0% HoH - - 25.5% 31.5% Gross profit - 472 537 630 YoY ---33.5% HoH - - 13.8% 17.3% % of revenue - 66.0% 63.8% 61.1% Marketing expenses - 164 152 165 YoY ---0.6% HoH - - -7.3% 8.6% Adjusted EBITDA - 76 141 177 YoY ---132.9% HoH - - 85.5% 25.5% % of revenue - 10.6% 16.7% 17.2% Income before income tax - -7 - -121 YoY ---- HoH ---- % of revenue - - - - Restaurants ('000 stores) 138 157 173 207 YoY - - 25.4% 31.8% HoH - 13.8% 10.2% 19.7% Returning active consumers (mn)26293337 YoY 27.0% - 23.6% 28.3% HoH - 10.0% 12.4% 14.2% Order frequency (times) 13.1 13.2 13.2 13.6 Number of orders (mn) - 195 218 257 YoY ---31.7% HoH - - 11.8% 17.8% Average order value (EUR) 20.7 20.6 20.7 22.2 YoY -0.4% - -0.1% 7.8% HoH --0.6%0.4%7.3% GMV (EURmn) - 4,013 4,539 5,702 YoY ---42.1% HoH - - 13.1% 25.6% Source: Shared Research based on publicly disclosed data Note: The Just Eat business was consolidated on April 15, 2020. The figures in this table assume the business was consolidated in January 1, 2019. Note: Returning Active Consumers are Active Consumers who have ordered at least once in the past 12 months. These are Shared Research estimates based on Active Consumers times the percentage of Returning Active Consumers. Note: Order frequency is the number of times Returning Active Consumer have placed orders in the past 12 months. It is calculated as Orders (for the half) ÷ Returning Active Consumers (average of RAC at the start and end of the half).

11/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Delivery Hero SE Delivery Hero SE FY12/18 FY12/19 FY12/20 (EURmn) H1H2H1H2H1 Revenue 293 372 511 727 958 YoY - -18.1% 74.2% 95.5% 87.4% HoH -35.4% 26.7% 37.4% 42.2% 31.8% Cost of sales 125 193 343 584 790 YoY - 11.3% 174.5% 202.2% 130.7% HoH -28.1% 54.8% 77.3% 70.4% 35.4% Gross profit 168 179 168 143 167 YoY - -36.2% -0.1% -20.1% -0.7% HoH -39.9% 6.2% -5.9% -15.1% 17.0% % of revenue 57.4% 48.1% 32.9% 19.7% 17.5% Marketing expenses 145 169 231 264 291 YoY - -34.6% 59.4% 56.4% 25.9% HoH -43.8% 16.5% 36.8% 14.3% 10.1% Operating result 104 -345 -240 -408 -455 YoY ----- HoH -55.7%---- % of revenue 35.3%---- Adjusted EBITDA -37-63-171-260-320 YoY ----- HoH ----- % of revenue ----- Earnings before Income taxes -102 -157 -192 -472 -460 YoY ----- HoH ----- % of revenue ----- Source: Shared Research based on publicly disclosed data Delivery Hero SE KPIs FY12/18 FY12/19 FY12/20 (EURmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 Number of orders (mn) 80 86 95 108 125 144 181 216 239 281 362 YoY 51.6% 48.5% 49.1% 46.7% 55.2% 66.9% 91.9% 99.4% 91.6% 94.6% 99.5% QoQ 8.7% 7.7% 9.4% 14.6% 15.0% 15.8% 25.7% 19.1% 10.4% 17.7% 28.9% GMV 971 1,041 1,120 1,323 1,508 1,684 1,972 2,272 2,378 2,768 3,356 YoY 42.5% 40.7% 39.7% 45.7% 55.3% 61.8% 76.1% 71.8% 57.7% 64.3% 70.2% QoQ 6.9% 7.3% 7.6% 18.1% 14.0% 11.7% 17.1% 15.2% 4.7% 16.4% 21.2% Source: Shared Research based on publicly disclosed data

DoorDash, Inc. DoorDash, Inc. FY12/19 FY12/20 (USDmn) Q1Q2Q3Q4Q1Q2Q3 Revenue 133 215 239 298 362 675 879 YoY ----172.2%214.0%267.8% QoQ - 61.7% 11.2% 24.7% 21.5% 86.5% 30.2% Total cost and expenses 327 343 396 435 485 648 914 YoY ----48.3%88.9%130.8% QoQ - 4.9% 15.5% 9.8% 11.5% 33.6% 41.0% Income from operations -194 -128 -157 -137 -123 27 -35 YoY ------QoQ ------Adjusted EBITDA -144 -103 -125 -103 -70 79 86 YoY ------QoQ ------8.9% % of revenue -----11.7%9.8% Income before income taxes -191 -190 -151 -134 -128 23 -42 YoY ------QoQ ------% of revenue -----3.4%- Number of total orders (mn)50617082103204236 YoY ----106.0%234.4%237.1% QoQ - 22.0% 14.8% 17.1% 25.6% 98.1% 15.7% Marketplace GOV 1,560 1,880 2,097 2,502 3,083 6,150 7,252 YoY ----97.6%227.1%245.8% QoQ - 20.5% 11.5% 19.3% 23.2% 99.5% 17.9% Source: Shared Research based on publicly disclosed data Note: Marketplace GOV is the total dollar value of Marketplace orders completed on DoorDash’s local logistics platform, including taxes, tips, and any applicable consumer fees, including membership fees related to DashPass.

For details on previous quarterly and annual results, please refer to the Historical performance section.

12/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Company forecast for FY08/21

FY02/18 FY02/19 FY02/20 FY02/21 (JPYmn) 1H Act. 2H Act. FY Act. 1H Act. 2H Act. FY Act. 1H Act. 2H Act. FY Act. FY Est. Sales 2,569 2,862 5,431 3,120 3,547 6,666 3,829 6,478 10,306 28,000 YoY 1.7% 18.4% 9.8% 21.4% 23.9% 22.7% 22.7% 82.7% 54.6% 171.7% Cost of sales 924 1,096 2,020 1,194 1,276 2,470 1,290 1,733 3,024 YoY 4.8% 30.8% 17.4% 29.2% 16.4% 22.2% 8.1% 35.8% 22.4% Gross profit 1,645 1,766 3,410 1,926 2,271 4,196 2,538 4,745 7,283 YoY -1.6% -5.6% -3.7% -3.6% 3.8% 0.2% 7.4% 14.4% 12.3% Gross profit margin 64.0% 61.7% 62.8% 61.7% 64.0% 63.0% 66.3% 73.2% 70.7% SG&A expenses 1,304 1,269 2,573 1,966 2,270 4,236 3,527 6,379 9,906 YoY 0.8% -6.9% -3.3% 24.2% 44.3% 34.1% 46.2% 53.9% 51.3% SG&A ratio 50.8% 44.4% 47.4% 63.0% 64.0% 63.5% 92.1% 98.5% 96.1% Operating profit 341 496 837 -40 1 -39 -989 -1,634 -2,623 -13,000 YoY -8.4% 15.9% 4.6% - -99.8% - - - - - Operating profit margin 13.3% 17.3% 15.4% - 0.0% - - - - - Recurring profit 354 495 849 -19 12 -7 -966 -1,954 -2,920 -13,000 YoY -4.0% 15.3% 6.4% - -97.5% - - - - - Recurring profit margin 13.8% 17.3% 15.6% - 0.3% - - - - - Net income 225 333 559 -33 -70 -103 -905 -3,208 -4,112 -13,000 YoY 24.0%32.8%29.1%------Net margin 8.8%11.6%10.3%------Source: Shared Research based on company data

Initial forecast (as of October 15, 2020) For FY08/21, the company forecasts full-year gross merchandise volume (GMV) of JPY160.0bn (+56.0% YoY), revenue of JPY28.0bn (+171.7% YoY), an operating loss of JPY13.0bn (versus loss of JPY2.6bn in FY08/20), a recurring loss of 13.0bn (versus loss of JPY2.9bn), and a net loss attributable to owners of the parent of JPY13.0bn (versus loss of JPY4.1bn in FY08/20). The company sees FY08/21 as a period to prioritize investments to build the foundation of its business and plans to move forward with substantial investments. Additionally, it left its dividend forecast undetermined.

▷ The company announced that it will be moving its head office to a section of LINE’s offices to further strengthen its capabilities and speed up the creation of synergies with LINE. The impact of the head office relocation on earnings has also been factored

into the forecast. ▷ LINE group’s takeout food delivery service (Pockeo) is set to be transferred to Demae-can by the end of 2020. This will enable affiliated restaurants to use the same devices to manage delivery and takeout, so the company plans to boost service proposals

that combine delivery and takeout services from 2021.

Historical forecast accuracy

Results vs. Initial Est. FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Parent Parent Parent Parent Parent Parent Parent Cons. Cons. Cons. Sales (Initial Est.) 1,560 3,400 3,750 4,000 4,600 5,434 7,681 7,682 Sales (Results) 1,259 1,360 2,087 3,558 3,661 4,155 4,944 5,431 6,666 10,306 Results vs. Initial Est. 33.8% 4.7% -2.4% 3.9% 7.5% -0.1% -13.2% 34.2% Operating profit (Initial Est.) 211 363 550 650 800 819 100 101 Operating profit (Results) 244 211 278 362 547 573 801 837 -39 -2,623 Results vs. Initial Est. 32.0% -0.3% -0.6% -11.9% 0.1% 2.2% - - Recurring profit (Initial Est.) 212 357 510 656 800 824 117 118 Recurring profit (Results) 260 221 275 366 541 579 798 849 -7 -2,920 Results vs. Initial Est. 29.6% 2.4% 6.2% -11.7% -0.3% 3.0% - - Net income (Initial Est.) 88 196 232 343 450 478 79 80 Net income (Results) 146 115 97 167 97 348 433 559 -103 -4,112 Results vs. Initial Est. 9.8% -14.6% -58.2% 1.4% -3.9% 16.9% - - Source: Shared Research based on company data

13/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Medium-term business plan

On March 26, 2020, the company announced that it had signed an agreement to form a business and capital alliance with LINE Corp. (unlisted), and that it had also entered into a separate agreement under which LINE Corp. and Mirai Fund Limited Liability Partnership had pledged to underwrite the company’s issuance of new shares through third-party allotment, which in turn would lead to changes in the company’s principal shareholder and controlling company. With the conclusion of these agreements, the company created a new medium-term management plan spanning the three-year period from FY08/21 to FY08/23 on October 15, 2020. Under its medium-term plan, the company aims to make food delivery an everyday occurrence.

Targets Medium-term management plan FY08/20 FY08/21 FY08/22 FY08/23 Business targets (JPYmn) Act. Target Target Target Gross merchandise volume 102,700 160,000 250,000 340,000 YoY 31.5% 55.8% 56.3% 36.0% Revenue 10,306 28,000 60,000 97,000 YoY 54.6% 171.7% 114.3% 61.7% Revenue as % of gross merchandise volume 10.0% 17.5% 24.0% 28.5% Operating profit -2,623 -13,000 -2,000 12,000 Demae-can coverage of the total population 26.2% 34.2% - 50.0% Source: Shared Research based on company materials Note: The ratios of Demae-can coverage of the total population are Shared Research estimates based on the Japanese population as of May 2020 (126mn, Ministry of Internal Affairs and Communications) and population coverage disclosed by the company.

Assumptions in earnings targets The company plans to make major investments in growing the Demae-can business in FY08/21, turn the Demae-can website profitable excluding Sharing Delivery losses in FY08/22, and have the Sharing Delivery business post a full-year profit in FY08/23.

▷ The company said that its medium-term plan does not incorporate any major changes in its fee structure. The reduction in the delivery commission implemented in January 2021 (reduced from 30% to 25%; was 23% for a limited time through December) was factored into the medium-term management plan. There is some impact from the changes made in March 2020 but over the term of the plan, it assumes higher growth rates for order fees than gross merchandise volume. ▷ When Demae-can was putting together its medium-term plan, it assumed a CAGR of 20–30% for the domestic food delivery market. It thinks that a similar growth rate will be maintained in the medium term, even after the COVID-19 pandemic settles down. (Part of the growth in the domestic food delivery market will be driven by the company’s own growth.) The COVID-19

pandemic has gotten consumers to recognize the convenience of food delivery and triggered a shift toward restaurants premised on takeout. For this reason, Demae-can expects high growth rates for the time being. The company assumes that its growth in gross merchandise volume will outpace the market as it increases market share. ▷ Demae-can aims to make restaurant food deliveries an everyday occurrence, and thinks this will see the average order decline gradually from about JPY2,800 in August 2020. The company said this is due to a tendency for average order value to decline for high-frequency customers, and its plans to tap into the singles demographic in addition to families. ▷ The company said there were no noteworthy changes to previously announced uses of the JPY30.0bn it raised from the LINE group. It stated that it will spend JPY5.4bn of the funds on marketing in FY08/21 and JPY4.3bn in FY08/22. This points to a further JPY5.0bn or so in FY08/23 as the company said that marketing expenses would be roughly steady through FY08/23. Because it expects revenue growth, the ratio of marketing expenses to revenue will decline gradually. ▷ The company expects revenue as a share of gross merchandise volume to climb in stages, from 10.0% in FY08/20 to 28.5% in FY08/23 as it expects an increasing share of its affiliates to use Sharing Delivery services. Gross merchandise volume from

affiliates using Sharing Delivery services was about 20% in FY08/20 (80% was from affiliates’ own deliveries), but the company thinks that in FY08/23 this will account for over 50% of gross merchandise volume. The company says that it expects to have delivery bases (Sharing Delivery bases) in all Japanese prefectures in 2023, and also anticipates significant growth in the

14/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

number of delivery personnel as a consequence, from 6,000 in October 2020 to tens of thousands by FY08/23. It also expects wages for part-timers to swell to some 4–5x October 2020 levels in FY08/23. ▷ The company said delivery bases (Sharing Delivery bases) were necessary to maintain delivery quality as it grew, but that there would be several other options in the future to achieve the same goal. For example, the company has begun outsourcing work to individuals and corporations in January 2021. It is moving forward with a hybrid system in which it secures delivery infrastructure by establishing delivery bases (Sharing Delivery bases) while outsourcing deliveries to companies and individuals during peak hours to suppress fixed costs. Outsourcing to individuals requires them to have a vehicle (motorcycle, bicycle, or car) and smartphone. Compensation per delivery is fixed (there are incentives for volume). The company says it ensures quality on the delivery front by conducting online interviews and having workers participate in online information sessions.

Projected revenue by revenue type (raw figures not disclosed)

Source: Shared Research based on company materials

Growth strategy

▷ Expanding the number of affiliated restaurants: The company intends to strengthen its sales force to expand the number of affiliated restaurants to 100,000 by end-December 2022. Interim targets are 50,000 by end-December 2020 and 80,000 by end-December 2021. This strategy entails first growing the number of affiliated restaurants, resulting in more gross

merchandise volume and active users, and thereby increasing density, boosting delivery efficiency. As of FY08/20, delivery efficiency (average number of deliveries per hour) was about 1.5. The frequency needed for deliver bases (Sharing Delivery bases) to be profitable varies due to varying rents and personnel expenses. The company said that some 20–30% of the bases in its network were in the black in FY08/20. It said it was targeting somewhat over two deliveries per hour as a benchmark for profitability, and that it would improve delivery efficiency by increasing density of affiliated restaurants and making improvements to its delivery system (such as pickups from several affiliated restaurants in the same direction). ▷ Expanding the number of users: In addition to rebranding to boost its appeal to the younger demographic, the company plans to strengthen user communication. Further, it plans to boost the number of users and promote the use of its service by maximizing marketing effectiveness through linkage with LINE ID (launched in November 2020). The company plans to target new users primarily based on information from LINE. For existing users, the company plans to boost loyalty by making recommendations based on their Demae-can purchasing history. ▷ Expanding Sharing Delivery: The company aims to improve profitability over the medium-term by differentiating itself through delivery quality while also increasing population coverage from 30% in August 2020 to more than 50% by August 2023.

15/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Reasons why Demae-can strengthened its capital and business alliance with the LINE group In March 2020, the company announced that it had entered into an agreement to strengthen its capital and business alliance with the LINE group. With the strengthening of the ties between the two groups, going forward Demae-can will be drawing upon the management resources of the LINE group in a number of different ways, including (1) making use of LINE’s LINE ID service, (2) procuring funding from LINE for growth-oriented investments, (2) procuring additional personnel from LINE to help with systems development work and marketing, and (4) help with the expansion of its takeout food delivery service into new territories. By combining its own ID system with LINE ID to create a new ID system known as ONE ID, Demae-can hopes to make it easy for the 84mn users of LINE to make use of its takeout food delivery service. With the JPY30bn in new equity capital it will receive from the issuance of new shares, Demae-can will have the funds to finance spending on systems development work, establish more delivery bases (Sharing Delivery bases), and do more marketing. In additional to the financial backing, Demae-can will also be able to draw upon LINE’s human resources to help with systems development and marketing. And, because LINE operates its own takeout food delivery service (under the name Pockeo), Demae-can is also expecting to generate synergies as it absorbs the operations of the delivery service operated by LINE into its own operations.

Outline of capital and business alliance between Demae-can and LINE Corp. Details of joint businesses between the two companies

▷ Optimizing use of database including information on users, member stores, and order histories at Demae-can ▷ Optimize use of tracking system at Demae-can ▷ Promoting transition to ONE ID (combining ID with LINE ID) at Demae-can ▷ Developing Business Intelligence (BI) tools to increase the visibility of key performance indicators, such as order numbers and active users ▷ Upgrading management tools (CMS tools) for store operators ▷ Creating a main customer interface that can be customized by individual users ▷ Promoting Demae-can’s Sharing Delivery service (contract delivery agent) ▷ Promoting takeout order services ▷ Optimizing marketing and branding strategies for websites, LINE, and apps ▷ Putting one-to-one marketing and PDCA management into practice

Major areas of agreement in business alliance

▷ The LINE Delima home delivery service operated by LINE Corp. will be rebranded under the Demae-can name (thereby uniting the two delivery services under the Demae-can brand name) ▷ The Pockeo home delivery service operated by LINE Corp (one of the businesses that Demae-can will take over from LINE Corp.) will be subsequently merged with Demae-can’s home delivery service operations ▷ Under a separate agreement between the two companies, LINE Corp. will dispatch its own IT system and marketing managers to Demae-can.

16/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Planned use of proceeds from new share issue (expenditures planned for between May 2020 and August 2023)

Scheduled timeframe for use of net proceeds (JPYmn) FY08/20 FY08/21 FY08/22 FY08/23 SUM Capital funds (system upgrades, development activities) 2,130 1,400 1,400 970 5,900 Operating funds (marketing expenses) 6,400 5,360 4,340 - 16,100 Acquiring of new active users 2,710 1,330 880 - 4,920 Promoting of orders from existing active users 680 1,260 840 - 2,780 Enhancing brand recognition 2,370 1,780 1,190 - 5,340 Other sales promotion 280 70 40 - 390 Hiring delivery staff 360 920 1,390 - 2,670 Operating funds (increasing delivery staff) 980 3,100 3,620 - 7,700 Total 9,510 9,860 9,360 970 29,700 Source: Shared Research based on company data

JPY5.9bn allocated for capital spending (IT system upgrades and development work) System-related investment plans include fundamental upgrades of existing systems, accelerated development of the company’s ONE ID and delivery systems, and changes in its website that will allow users to make personalized settings. The schedule for spending in this area calls for a total of JPY2.1bn in systems-related investments in FY08/20, JPY1.4bn in FY08/21, another JPY1.4bn in FY08/22, and JPY970mn in FY08/23. The investment spending plans have budgeted a total of approximately JPY4.6bn for outside contractors. During this time, Demae-can will also be aided by a team of 50 engineers from LINE’s software development team.

JPY16.1bn allocated for operating funds (including expenditures on marketing and the hiring of more delivery personnel) Funds allocated for marketing include money for advertising to help increase recognition of the Demae-can brand, and money for promotions run on the LINE platform. During FY08/20, marketing-related spending will focus mainly on initiatives designed to attract more active users and increase brand recognition, and in FY08/21, this spending will center on initiatives aimed at increasing orders made by existing active users. The company has also allocated money for the hiring of more delivery personnel in FY08/22.

JPY7.7bn allocated for operating funds (for the expansion of delivery staff) As the company accelerates its expansion into new service areas, it will need to make additional investments in business infrastructure in order to handle the rapid growth in delivery orders.

Reasoning behind capital/business alliance and stock purchase agreement with LINE Corp. Despite the large amount of investment spending and the resulting operating losses that it incurred in FY08/19 to carry out upgrades of its applications and website (including changes in design, added functionality, and other changes making the apps and website more user-friendly), Demae-can recognized that it had still not done enough investing to mount a serious challenge to large players in the industry that had much more substantial capital resources. Further considering the current operating environment, the company recognized that if it was to continue growing steadily in the future, it must quickly establish its position as the top delivery platform in the market before larger and better-capitalized competitors gain a dominant position in the market. Accordingly, the company came to the conclusion that it needed to join forces with LINE Corp. and bring out the synergies from their combined resources in order to implement the following initiatives as soon as possible:

17/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Reasons why the LINE group strengthened its capital and business alliance with Demae-can, and LINE’s vision for the future Establishing closer ties with Demae-can fits in with LINE’s overall strategy of building up its LINE communication app to the point that it becomes a “super-app” (a comprehensive app that can handle a wide variety of daily transactional needs) and its ongoing efforts to use its LINE communications app as a way to expand into other areas, including payments/financing, marketing, O2O commerce, and content. For an app to gain super-app status, it must be useful in everyday life, and food is an important area in this regard because there are so many contact points with customers.

More specifically, the future plans call for becoming the top player (in terms of handling volumes) in the food delivery market, not only in Japan but in Asia as well.

Over the medium to long term, the two companies are looking to build a comprehensive food marketing platform to handle not only delivery, cloud kitchen, and takeout services, but also dine-in and mobile orders.

18/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Business Business description

The company operates Demae-can, a food delivery website for restaurants. Under its Demae-can business, the company operates a dedicated online platform through which consumers looking for speedy home delivery service (in as little as 20 minutes) can order food from affiliated restaurants. The company offers an outsourced delivery platform, Sharing Delivery, for restaurants without their own delivery infrastructure. Since Q3 FY08/20, amid a tough climate for the restaurant industry due to the COVID- 19 outbreak, the company has grown revenue sharply by responding to demand for delivery from restaurants and consumers (revenue was up 73.3% YoY in Q3 and 91.5% YoY in Q4). At the same time, the company incurred upfront spending, such as the expense of setting up delivery bases (Sharing Delivery bases) and advertising. In FY08/20, it reported gross merchandise volume (GMV) of JPY102.7bn (+31.0% YoY), revenue of JPY10.3bn (+54.6% YoY), and an operating loss of JPY2.6bn (an operating loss of JPY39mn in FY08/19). The Demae-can business reported revenue of JPY9.4bn (+73.8% YoY) and an operating loss of JPY2.5bn (an operating loss of JPY18mn in FY08/19). The company only operated in Japan as of FY08/20.

19/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Demae-can business

Business structure

The company’s business structure consists of providing a platform that connects consumers, who wish to place food delivery orders, with restaurants providing such services and charging processing fees. Both consumers and restaurants benefit by using the company’s platform.

Consumers enjoy convenience (ordering via an app; requires only initial registration and offers various payment methods), product selection (proportional to the number of affiliated restaurants), and discounts (reward points, coupons). Affiliated restaurants benefit from reduced promotion costs (attracting consumers who do not receive newspaper promotions), lighter burden for food delivery and sharp drop in human errors, call center support, and the company’s Sharing Delivery service for restaurants without proprietary delivery services (limited to certain areas).

Affiliated restaurants can measure cost-effectiveness as they pay order processing fees in line with sales. It also facilitates reaching younger customer segments. Using Sharing Delivery allows affiliated restaurants without their own food delivery infrastructure to access a new source of revenue.

Affiliated restaurants The company was working aggressively to expand its affiliated restaurant network. The company’s strategy entails first growing the number of affiliated restaurants, resulting in more orders and active users, and thereby increasing density, boosting delivery efficiency. In October 2020, the company had important affiliated restaurant chains in the following categories.

▷ Pizza: Pizza-La, Domino’s Pizza, Pizza Hut ▷ Hamburgers: McDonald’s, Mos Burger, KFC, Lotteria, Freshness Burger ▷ Curry: CoCo Ichibanya ▷ Octopus balls: Gindaco ▷ Family restaurants: Gusto, Saizeriya, Joyfull, Coco’s, Bikkuri Donkey, Royal Host ▷ Japanese: Ootoya Gohan-Dokoro ▷ Beef bowls: Sukiya, Yoshinoya, Matsuya, Nakau, Tendon Tenya ▷ Udon noodles: Marugame Seimen, Hanamaru ▷ Soba noodles: Fuji Soba ▷ Sushi: Sushiro, Hamazushi, Kura Sushi, Kappa Sushi, Sushi Choushimaru, Sushizanmai ▷ Boxed lunches (bento): Hotto Motto, Hokka Hokku Tei, Origin Bento ▷ Chinese: Gyoza no Ohsho, Ringer Hut, Kourakuen, Hidakaya, Ippudo ▷ Izakaya bars: Torikizoku, Uotami, Kushikatsu Tanaka, Dandadan Sakaba ▷ Coffee shops: Starbucks, Doutor, Mister Donut ▷ Dessert: Baskin-Robbins, Fujiya, Cozy Corner

Spending per order Demae-can aims to make restaurant food deliveries an everyday occurrence, and thinks this will see the average order decline gradually from about JPY2,800 in August 2020. The company said this is due to a tendency for average order value to decline for high-frequency customers, and its plans to tap into the singles demographic in addition to families.

External factors such as the day of the week and weather Accurate analysis of the effects of external factors is difficult because there are multiple variables, many of which change based on region and time, but in general the following effects can be seen.

20/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

▷ A trend toward more orders on weekends and holidays compared to weekdays ▷ A trend toward more orders on cold days, hot days, and rainy days when going out is troublesome. The company’s ability to maintain delivery bases and personnel gives it an edge on this front. ▷ A trend toward more orders in July and August when school is out of session ▷ Since demand for home delivery goes up at night, a trend toward more orders at night than during the day

Services offered via LINE Under the terms of the capital/business alliance between the two companies announced in March 2020, LINE Delima was rebranded under the Demae-can name and the two order systems will be merged. When an order is made through LINE, Demae- can splits the commission from the affiliated restaurant with LINE (revenue sharing rate undisclosed). The Pockeo home delivery service for takeout food is another business operated by LINE that will be transferred to Demae-can and merged with Demae- can’s home delivery service. (Launch planned by end-2020.)

Sharing Delivery (outsourced delivery platform)

Sharing Delivery enables restaurants without proprietary delivery services to outsource delivery. The company fully launched the service in FY08/17. When an affliated restaurant uses Sharing Delivery, the company receives 25% of the product price (excluding tax) as a commission (but not in the case of an affliated restaurant conducting in-house delivery). As of end-FY08/20, it had 384 delivery bases (up by 48 from end-May 2020) and covered roughly 30% of the Japanese population.

▷ The company is moving forward with a hybrid system in which it secures delivery infrastructure by establishing delivery bases (Sharing Delivery bases) while outsourcing deliveries to companies and individuals during peak hours to suppress fixed costs. ▷ Some of the delivery bases used for its Sharing Delivery service are operated directly while others are operated through partnerships with other companies, such as newspaper delivery service operators. Sharing Delivery depended heavily on partner companies early on, but its proportion of directly operated delivery bases has steadily increased, and, as of end- FY08/19, the company directly operated 115 of this service’s delivery bases, versus 100 operated by partner companies. ▷ Gross merchandise volume from affiliates using Sharing Delivery services was about 20% in FY08/20 (80% was from affiliates’ own deliveries), but the company thinks that in FY08/23 this will account for over 50% of gross merchandise volume. The company says that it expects to have delivery bases (Sharing Delivery bases) in all Japanese prefectures in 2023. ▷ The delivery commission is passed on to the user depending on how much the restaurant in question adds to the menu price and delivery charge.

Benefits for restaurants

▷ Low-risk acquisition of delivery networks: Stores can gain access to a delivery network by paying a delivery fee (passed on to the consumer in product pricing) and do not need to take on investment risk, e.g., delivery vehicles, personnel. ▷ Acquisition of new customer segments: In addition to securing food delivery demand, stores can access new customer segments that are reluctant to enter physical stores. The company has observed this effect at certain major chain restaurants. ▷ High average spending per customer: Stores enjoy growth in orders from Demae-can users, whose average spending is high (just under JPY3,000). ▷ Improved operational efficiency and lower costs: Utilizing the company’s platform leads to reduced promotional and operational costs, such as order-related costs.

21/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Benefits for consumers

▷ Expanded product selection: Users can order from major chains or local restaurants that previously did not offer delivery services. ▷ Enhanced convenience: Users can order from stores they previously found difficult to enter.

Sharing Delivery’s delivery network Sharing Delivery was launched in Makuhari (Chiba Prefecture) in August 2016. The company announced a business alliance with Asahi Shimbun in December 2016 and cooperation with Asahi Shimbun’s delivery network of ASA stations; the company plans to bring this alliance to an end in June 2020, as detailed below. This was followed by the establishment of its first delivery base (Sharing Delivery base) in Sagamihara, Kanagawa Prefecture, in March 2017. From August 2019, in order to speed up development into focus areas, the company has mainly opened directly operated delivery bases. As a rule, it is keeping partner run delivery bases open, but is switching those that no longer meet criteria or those with quality issues to direct operation.

▷ The company said delivery bases (Sharing Delivery bases) were necessary to maintain delivery quality as it grew, but that there would be several other options in the future to achieve the same goal. For example, the company has begun outsourcing work to individuals and corporations in January 2021. It is moving forward with a hybrid system in which it secures delivery infrastructure by establishing delivery bases (Sharing Delivery bases) while outsourcing deliveries to companies and individuals during peak hours to suppress fixed costs. Outsourcing to individuals requires them to have a vehicle (motorcycle, bicycle, or car) and smartphone. Compensation per delivery is fixed (there are incentives for volume). The company says it ensures quality

on the delivery front by conducting online interviews and having workers participate in online information sessions.

The company dissolved its business partnership with Asahi Shimbun (June 14, 2020).

▷ With the objective of establishing and expanding Sharing Delivery as a new business model, Demae-can and Asahi Shimbun entered into a business partnership on December 15, 2016. Since then, the company expanded Sharing Delivery in collaboration with Asahi Shimbun’s newspaper delivery office ASA, and nearly all ASA locations interested in participating in the business are already involved. Aside from ASA, the company is currently expanding its service area through several

partnered regional transport companies as well as directly managed delivery. Upon reevaluating the business partnership with the speedy expansion of Sharing Delivery bases as well as restaurant and user growth in mind, the company decided to dissolve the partnership. ▷ After the partnership is dissolved, there will no longer be prioritized proposals through Asahi Shimbun for new ASA locations as a delivery partner. As for the outsourcing contracts with ASA, the contracts are formed between each ASA-participating store and the company, and the company will consult with each ASA location going forward. Additionally, the company plans to continue focusing on expansion through directly managed delivery.

Delivery efficiency As of FY08/20, delivery efficiency (average number of deliveries per hour) was about 1.5. The frequency needed for delivery bases (Sharing Delivery bases) to be profitable varies due to varying rents and personnel expenses. The company said that some 20–30% of the bases in its network were in the black in FY08/20. It said it was targeting somewhat over two deliveries per hour as a benchmark for profitability, and that it would improve delivery efficiency by increasing density of affiliated restaurants and making improvements to its delivery system (such as pickups from several affiliated restaurants in the same direction).

Impact of time to delivery on close ratio Time to delivery plays a crucial role in increasing the close ratio. According to company data, if time to delivery goes over 60 minutes, the close ratio drops to below 10% of what it would have been for time to delivery of 30 minutes or less.

22/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Impact of time to delivery on close ratio (close ratio=number of orders/ restaurant page views)

100% 100%

80% ⇒ Time to delivery over 60 minutes lowers close ratio below 10% of "30 60% minutes or less"

40% 45%

20% 24% 15% 10% 8% 0% 30 or less 31–40 41–50 51–60 61–70 71–80 (minutes) Source: Shared Research based on company data

Delivery quality Because delivery quality is an important determinant of whether or not users place repeat orders, the company has established its own training center for delivery drivers and otherwise puts a lot of effort into improving delivery quality metrics through a range of other measures, including creating manuals and specialized training materials, standardizing procedures at delivery bases, employing trained specialists to conduct periodic inspections of delivery bases, and conducting sanitation checks of delivery bags. The company says it ensures quality on the delivery front by conducting online interviews and having workers participate in online information sessions.

Investments in directly managed delivery bases For each directly managed delivery base, the company rents the building where the base is located in as well as one or two motorbikes and five to six electric bicycles for use in making deliveries. Thus, for each directly managed base it expects to incur cumulative loss of JPY20–30mn during the first 10–15 months in operation and make a security deposit for the building. According to the company, the delivery capacities of each hub will depend on their respective numbers of motorbikes and electric bicycles (assuming full staffing).

Developments in in-house delivery (delivery carried out by restaurants) Demae-can thinks that the ratio of restaurants outsourcing delivery will increase overall due to the difficultly small and medium- sized chains and independent restaurants have in handling delivery in-house. On the other hand, demand due for delivery has risen owing to the COVID-19 pandemic, prompting some major chains to arrange their own delivery personnel. The general benefits of using food delivery are that it meshes well with Japanese food preparation culture, which emphasizes hygiene and quality, and that restaurant staff can use the idle time when deliveries are being made to prepare for orders. As of January 2021, the company says it cannot determine whether the trend will be for restaurants to use in-house delivery once they become more experienced in food delivery, or whether it will be more common for them to outsource the task. The company’s policy is to increase the number of affiliated restaurants that use Sharing Delivery (the company’s delivery platform) and those that do not.

23/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Interpreting disclosed data Revenue breakdown As of January 2021, pay-for-use charges for affiliated restaurants were as shown below, in principle. Pay-for-use charges differ according to order size. There is no base (fixed) charge for initial set-up or monthly operating expenses.

A. Demae-can service fees: 10% of order cost (before tax, including points cost) B. Delivery commissions (no charge when affiliated restaurant handles delivery): 25% of order cost (before tax; 23% until December 31, 2020) C. Payment processing fees: Maximum of 3% of order value (before tax; for cashless payments, fees paid to credit card company)

In January 2021, the company reduced the delivery commission from 30% to 25% (until December 2020, it was 23% for a limited time). Demae-can reduced the commission to a level that is easy for affiliated restaurants to accept in consideration of the uncertainty about when the COVID-19 pandemic will end and high delivery demand. The company says it factored in this reduction when formulating the medium-term management plan. It also says the lower commission level is profitable. While it is possible the company will implement further reductions in the delivery commission in certain cases, it does not plan to lower the commission for the purpose of competing with new entrants who set low commissions as long as can secure a certain transaction volume per restaurant. This is because part of the value of Demae-can’s platform is its ability to attract customers to and increase consumer recognition of affiliated restaurants.

From Q3 FY08/20, the company has been disclosing revenue for three classifications: Demae-can service fees (mainly A above): delivery commissions (mainly B above plus delivery fees shouldered by the user), and Other (C above, advertising business, and container and ingredient procurement services). Note: The company said that payment processing fees are equivalent to cost of revenue, so do not contribute to gross profit.

Key performance indicators The company discloses three key performance indicators that it watches closely: gross merchandise volume (GMV: JPY102.7bn in FY08/20, +31.5% YoY), the number of affiliated restaurants (33,000, +65.7% YoY), and the number of active users (3.92mn, +30.7% YoY), defined as users who have made an order within the past year. The company’s strategy entails first growing the number of affiliated restaurants, resulting in higher GMV and more active users, and thereby increasing density, boosting delivery efficiency. Key indicators that the company watches closely but does not disclose include its order conversion rate (the percent of website viewers that place orders), number of orders, order unit price, and repeat order rate.

▷ Demae-can service fee breaks down into the number of orders, order cost (value per order), and fee rate. According to the company, order cost (value per order) is largely steady. Further, the number of orders can be calculated as the active number

of users times the repeat order rate. ▷ It is possible to break down delivery commissions received from affiliated restaurants in the same way as those for Demae-can services. Because there are two types of orders (those for outsourced delivery and those delivered by the affiliate restaurant itself) delivery commissions break down into the number of orders (only those delivered by the company), order cost (value per order), and fee rate. Delivery commissions also include delivery fees shouldered by the user.

24/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Demae-can business KPIs

Key performance indicators (KPIs to be disclosed quarterly starting in FY08/21) Key performance indicators FY08/19 FY08/20 FY08/21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Cumulative GMV (JPYmn) - - - - 19,433 - - 102,700 30,700 YoY ------58.0% Quarterly GMV (JPYmn) ----19,433---30,700 YoY ------58.0% QoQ ------Number of affiliated stores 17,834 18,572 19,452 19,911 20,720 21,450 24,000 33,000 45,000 QoQ change 627 738 880 459 809 730 2,550 9,000 12,000 YoY 13.5% 15.5% 18.3% 15.7% 16.2% 15.5% 23.4% 65.7% 117.2% QoQ 3.6% 4.1% 4.7% 2.4% 4.1% 3.5% 11.9% 37.5% 36.4% Number of active users (mn) 2.74 2.82 2.90 3.00 3.10 3.20 3.70 3.92 4.71 QoQ change 0.050.080.080.100.100.100.500.220.79 YoY 11.8% 10.6% 10.7% 11.5% 13.1% 13.5% 27.6% 30.7% 51.9% QoQ 1.9% 2.9% 2.8% 3.4% 3.3% 3.2% 15.6% 5.9% 20.2% Key performance indicators FY08/19 FY08/20 FY08/21 Quarterly Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 GMV per active user (JPY) ----6,372---7,115 YoY ------QoQ ------GMV per affiliate store (JPYmn) - - - - 0.96 - - - 0.79 YoY ------QoQ ------Source: Shared Research based on company data Note: GMV per active user and GMV per affiliated restaurant were calculated based on averages for active users and affiliated restaurants determined by the start and end figures for each quarter.

25/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Key performance indicators (KPIs disclosed in FY08/20 and earlier) No . o f o rd ers ('000) Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 655 673 700 818 775 660 792 729 733 732 773 828 2,028 2,252 2,254 2,333 8,868 FY08/15 723 763 837 960 954 825 908 858 876 872 966 1,017 2,323 2,739 2,642 2,855 10,559 FY08/16 929 962 1,034 1,194 1,178 1,129 1,162 1,134 1,165 1,097 1,241 1,306 2,924 3,502 3,460 3,643 13,529 FY08/17 1,215 1,280 1,298 1,521 1,513 1,377 1,507 1,444 1,427 1,384 1,636 1,676 3,792 4,411 4,378 4,696 17,278 FY08/18 1,565 1,787 1,733 1,997 2,032 1,909 2,056 1,899 2,017 1,996 2,153 2,180 5,085 5,938 5,972 6,330 23,325 FY08/19 2,110 2,049 2,125 2,621 2,535 2,322 2,515 2,290 2,329 2,429 2,449 2,674 6,284 7,478 7,134 7,552 28,448 FY08/20 2,352 2,324 2,471 2,776 2,710 2,730 3,030-----7,147 8,216 10,687 11,020 37,070 FY08/14 YoY change 56 101 97 79 97 56 90 88 111 92 111 119 254 232 290 322 1,098 FY08/15 YoY change 68 90 138 142 179 166 116 129 143 140 193 189 295 487 388 522 1,691 FY08/16 YoY change 206 199 196 235 224 304 254 276 289 225 275 288 601 763 818 788 2,970 FY08/17 YoY change 286 318 264 327 335 248 346 310 263 287 395 371 869 909 918 1,053 3,749 FY08/18 YoY change 350 508 435 476 519 532 549 455 590 612 517 504 1,293 1,527 1,594 1,633 6,047 FY08/19 YoY change 545 262 393 624 502 414 459 - 312 432 296 494 1,199 1,540 1,162 1,222 5,123 FY08/20 YoY change 242 275 346 155 175 408 515 - - - - - 863 738 3,553 3,468 8,622 FY08/14 YoY 9.3% 17.7% 16.1% 10.6% 14.3% 9.2% 12.7% 13.8% 17.9% 14.3% 16.7% 16.8% 14.3% 11.5% 14.8% 16.0% 14.1% FY08/15 YoY 10.3% 13.4% 19.7% 17.4% 23.1% 25.1% 14.7% 17.7% 19.4% 19.2% 25.0% 22.8% 14.6% 21.6% 17.2% 22.4% 19.1% FY08/16 YoY 28.5% 26.1% 23.4% 24.5% 23.5% 36.8% 27.9% 32.2% 32.9% 25.8% 28.5% 28.3% 25.9% 27.8% 31.0% 27.6% 28.1% FY08/17 YoY 30.8% 33.1% 25.5% 27.3% 28.4% 21.9% 29.8% 27.3% 22.6% 26.2% 31.8% 28.4% 29.7% 26.0% 26.5% 28.9% 27.7% FY08/18 YoY 28.8% 39.7% 33.5% 31.3% 34.3% 38.6% 36.4% 31.5% 41.3% 44.2% 31.6% 30.0% 34.1% 34.6% 36.4% 34.8% 35.0% FY08/19 YoY 34.8% 14.6% 22.7% 31.2% 24.7% 21.7% 22.3% 20.6% 15.5% 21.7% 13.7% 22.7% 23.6% 25.9% 19.5% 19.3% 22.0% FY08/20 YoY 11.5% 13.4% 16.3% 5.9% 7.0% 18.0% 21.0% - - - - - 13.7% 9.9% 49.8% 45.9% 30.3% No. of affiliat ed st ores Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 11,323 11,383 11,510 11,545 11,563 11,644 11,350 11,414 11,482 11,493 11,551 11,636 11,510 11,644 11,482 11,636 11,636 FY08/15 11,600 11,628 11,680 11,737 11,752 11,812 11,854 11,947 12,011 12,084 12,167 12,213 11,680 11,812 12,011 12,213 12,213 FY08/16 12,256 12,412 12,505 12,588 12,548 12,529 12,700 12,936 13,018 13,226 13,418 13,656 12,505 12,529 13,018 13,656 13,656 FY08/17 13,920 14,033 14,206 14,366 14,456 14,559 14,669 14,839 14,953 15,099 15,208 15,318 14,206 14,559 14,953 15,318 15,318 FY08/18 15,411 15,533 15,712 15,867 16,000 16,081 16,175 16,318 16,439 16,685 16,874 17,207 15,712 16,081 16,439 17,207 17,207 FY08/19 17,372 17,577 17,834 18,081 18,343 18,572 18,760 19,122 19,452 19,395 19,680 19,911 17,834 18,572 19,452 19,911 19,911 FY08/20 20,099 20,327 20,720 20,941 21,269 21,450 21,609 - 24,000 - - - 20,720 21,450 24,000 33,000 33,000 FY08/14 YoY change 95 145 289 311 487 576 276 347 405 393 419 300 289 576 405 300 300 FY08/15 YoY change 277 245 170 192 189 168 504 533 529 591 616 577 170 168 529 577 577 FY08/16 YoY change 656 784 825 851 796 717 846 989 1,007 1,142 1,251 1,443 825 717 1,007 1,443 1,443 FY08/17 YoY change1,664 1,621 1,701 1,778 1,908 2,030 1,969 1,903 1,935 1,873 1,790 1,662 1,701 2,030 1,935 1,662 1,662 FY08/18 YoY change1,491 1,500 1,506 1,501 1,544 1,522 1,506 1,479 1,486 1,586 1,666 1,889 1,506 1,522 1,486 1,889 1,889 FY08/19 YoY change1,961 2,044 2,122 2,214 2,343 2,491 2,585 2,804 3,013 2,710 2,806 2,704 2,122 2,491 3,013 2,704 2,704 FY08/20 YoY change2,727 2,750 2,886 2,860 2,926 2,878 2,849 - 4,548 - - - 2,886 2,878 4,548 13,089 13,089 FY08/14 YoY 0.8% 1.3% 2.6% 2.8% 4.4% 5.2% 2.5% 3.1% 3.7% 3.5% 3.8% 2.6% 2.6% 5.2% 3.7% 2.6% 2.6% FY08/15 YoY 2.4% 2.2% 1.5% 1.7% 1.6% 1.4% 4.4% 4.7% 4.6% 5.1% 5.3% 5.0% 1.5% 1.4% 4.6% 5.0% 5.0% FY08/16 YoY 5.7% 6.7% 7.1% 7.3% 6.8% 6.1% 7.1% 8.3% 8.4% 9.5% 10.3% 11.8% 7.1% 6.1% 8.4% 11.8% 11.8% FY08/17 YoY 13.6% 13.1% 13.6% 14.1% 15.2% 16.2% 15.5% 14.7% 14.9% 14.2% 13.3% 12.2% 13.6% 16.2% 14.9% 12.2% 12.2% FY08/18 YoY 10.7% 10.7% 10.6% 10.4% 10.7% 10.5% 10.3% 10.0% 9.9% 10.5% 11.0% 12.3% 10.6% 10.5% 9.9% 12.3% 12.3% FY08/19 YoY 12.7% 13.2% 13.5% 14.0% 14.6% 15.5% 16.0% 17.2% 18.3% 16.2% 16.6% 15.7% 13.5% 15.5% 18.3% 15.7% 15.7% FY08/20 YoY 15.7% 15.6% 16.2% 15.8% 16.0% 15.5% 15.2% - 23.4% - - - 16.2% 15.5% 23.4% 65.7% 65.7% No. of active users (mn) Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 1.35 - - - 1.35 1.35 FY08/15 1.54 - - - 1.54 1.54 FY08/16 1.74 1.78 1.82 1.84 1.88 1.92 - - 1.82 1.92 1.92 FY08/17 1.95 1.98 1.98 2.03 2.08 2.13 2.17 2.21 2.24 2.29 2.33 2.35 1.98 2.13 2.24 2.35 2.35 FY08/18 2.38 2.43 2.45 2.48 2.52 2.55 2.58 2.59 2.62 2.65 2.66 2.69 2.45 2.55 2.62 2.69 2.69 FY08/19 2.71 2.72 2.74 2.78 2.81 2.82 2.84 2.88 2.90 2.94 2.95 3.00 2.74 2.82 2.90 3.00 3.00 FY08/20 3.02 3.05 3.10 3.14 3.17 3.20 3.25 - 3.70 - - - 3.10 3.20 3.70 3.92 3.92 FY08/14 YoY ------16.4% - - - 16.4% 16.4% FY08/15 YoY ------14.1% - - - 14.1% 14.1% FY08/16 YoY ------24.7% - - - 24.7% 24.7% FY08/17 YoY ------24.7% 24.2% 23.2% 24.3% 24.2% 22.4% - - 23.2% 22.4% 22.4% FY08/18 YoY 22.2% 22.7% 23.7% 22.3% 21.3% 20.0% 18.9% 17.2% 17.0% 15.7% 14.2% 14.5% 23.7% 20.0% 17.0% 14.5% 14.5% FY08/19 YoY 13.9% 11.9% 11.8% 12.1% 11.5% 10.6% 10.1% 11.2% 10.7% 10.9% 10.9% 11.5% 11.8% 10.6% 10.7% 11.5% 11.5% FY08/20 YoY 11.4% 12.1% 13.1% 12.9% 12.8% 13.5% 14.4% - 27.6% - - - 13.1% 13.5% 27.6% 30.7% 30.7% No. of Sharing Delivery bases Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Q1 Q2 Q3 Q4 FY FY08/17 12 10 21010 FY08/18 - - 17 - - 23 27 - 33 39 44 60 17 23 33 60 60 FY08/19 63 67 78 83 92 104 124 147 161 172 198 215 78 104 161 215 215 FY08/20 221 228 239 247 259 275 293 - 336 - - - 239 275 336 384 384 FY08/17 MoM change --+8 FY08/18 MoM change ------+4 - - +6 +5 +16 +7 +6 +10 +27 +50 FY08/19 MoM change +3 +4 +11 +5 +9 +12 +20 +23 +14 +11 +26 +17 +18 +26 +57 +54 +155 FY08/20 MoM change +6 +7 +11 +8 +12 +16 +18 - +43 - - +24 +36 +61 +48 +169 Notes: The company started disclosing data on active users in March 2017. Active user data through February 2017 reflect Shared Research estimates with exception of August data. Order figures include orders at partner companies such as NTT Docomo and LINE. Order figures are rounded down to the nearest million yen from January 2020. Monthly orders are not shown from April 2020 as the company discontinued monthly disclosures, ending with the March 2020 report.

Number of orders divided by number of active users (estimates through FY08/20 when the company disclosed approximate repeat order rate and orders) Orders / Active users Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/16 ------0.67 0.64 0.64 0.60 0.67 0.69 - - 1.90 1.90 7.05 FY08/17 0.63 0.65 0.66 0.76 0.74 0.66 0.70 0.66 0.64 0.61 0.71 0.72 1.91 2.08 1.95 2.00 7.35 FY08/18 0.66 0.74 0.71 0.81 0.81 0.75 0.80 0.73 0.77 0.76 0.81 0.81 2.08 2.33 2.28 2.35 8.67 FY08/19 0.78 0.75 0.78 0.95 0.91 0.83 0.89 0.80 0.81 0.83 0.83 0.90 2.29 2.65 2.46 2.52 9.48 FY08/20 0.78 0.77 0.80 0.89 0.86 0.86 0.94 - - - - - 2.31 2.57 2.89 2.81 9.46 FY08/17 YoY ------5.1% 3.4% 0.2% 2.0% 6.1% 4.2% - - 2.7% 5.3% 4.3% FY08/18 YoY 5.3% 14.1% 8.4% 6.8% 10.3% 14.9% 14.2% 11.4% 20.7% 24.0% 14.5% 13.8% 8.4% 12.2% 16.6% 17.7% 17.9% FY08/19 YoY 18.1% 1.5% 9.6% 17.2% 11.6% 9.6% 10.9% 9.0% 4.1% 9.8% 2.5% 10.3% 10.5% 13.9% 7.9% 7.0% 9.4% FY08/20 YoY -0.01% 1.5% 3.2% -6.3% -5.3% 3.9% 5.7% - - - - - 0.5% -3.2% 17.4% 11.7% -0.3% Source: Shared Research based on company data

Cost structure The company’s main costs can be divided into two groups.

26/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

A. Cost of revenue: Mainly fixed costs (depreciation, including depreciation of its software assets), but also variable costs, such as agent compensation (agent fees, payment processing fees) and communication costs (point system usage fees and data center costs). B. SG&A expenses: Mainly advertising expenses (to acquire new customers and boost its profile) and personnel expenses (including expenses associated with call center functions provided by a consolidated subsidiary).

The company also incurs costs through its Sharing Delivery service, including real estate leasing and personnel costs.

Cost of revenue (parent level)

Parent FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Par.Par.Par.Par.Par.Par.Par.Par.Par.Par. Revenue 1,259 1,360 1,427 1,717 1,965 2,381 2,976 4,057 5,395 9,375 YoY 8.8% 8.0% 4.9% 20.3% 14.5% 21.1% 25.0% 36.3% 33.0% 73.8% Cost of revenue 302 397 407 635 583 701 884 1,397 1,893 2,599 Labor costs 62 60 39 33 41 46 62 68 481 146 Outsourcing costs 18 3 4 7 5 9 5 12 52 217 Agency commissions 31 26 18 13 68 187 369 762 1,060 1,452 System development contract costs - - - 197 61 24 27 37 34 11 Various costs 298 395 410 434 477 458 486 578 314 888 Communication 161 176 175 173 185 185 211 261 343 380 Depreciation 71 127 141 147 166 174 150 148 210 280 Other 66 93 94 113 127 99 125 169 -239 227 % of revenue (cost ratio) 24.0% 29.2% 28.6% 37.0% 29.7% 29.5% 29.7% 34.4% 35.1% 27.7% Labor costs 4.9% 4.4% 2.7% 1.9% 2.1% 1.9% 2.1% 1.7% 8.9% 1.6% Outsourcing costs 1.4% 0.2% 0.3% 0.4% 0.3% 0.4% 0.2% 0.3% 1.0% 2.3% Agency commissions 2.5% 1.9% 1.2% 0.7% 3.5% 7.9% 12.4% 18.8% 19.6% 15.5% System development contract costs - - - 11.5% 3.1% 1.0% 0.9% 0.9% 0.6% 0.1% Various costs 23.7% 29.0% 28.7% 25.3% 24.3% 19.2% 16.3% 14.2% 5.8% 9.5% Communication 12.8% 12.9% 12.3% 10.1% 9.4% 7.8% 7.1% 6.4% 6.4% 4.1% Depreciation 5.6% 9.3% 9.9% 8.6% 8.4% 7.3% 5.1% 3.7% 3.9% 3.0% Other 5.3% 6.8% 6.6% 6.6% 6.4% 4.2% 4.2% 4.2% -4.4% 2.4% Gross profit 957 963 1,019 1,082 1,382 1,679 2,091 2,659 3,502 6,776 GPM 76.0% 70.8% 71.4% 63.0% 70.3% 70.5% 70.3% 65.6% 64.9% 72.3% SG&A expenses (parent level) FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Par. Par. Par. Par. Par. Par. Par. Par. Par. Par. SG&A expenses 713 740 753 827 906 1,171 1,418 1,956 3,749 9,537 Personnel (excl. salaries for temp. employees) 236 260 250 262 340 351 400 481 663 968 Salaries for temporary employees 89 90 71 - - - - 31 393 2,259 Advert ising expenses 111 118 140 139 166 361 448 742 1,555 3,895 Rents 2932------Depreciation 121210116 912131823 Amortization of goodwill 42 43 62 82 83 82 102 122 164 286 Other 194 187 220 334 311 368 457 566 957 2,106 YoY 8.0% 3.8% 1.7% 9.9% 9.5% 29.3% 21.1% 37.9% 91.7% 154.4% Personnel (excl. salaries for temp. employees) -3.1% 10.0% -3.5% 4.8% 29.7% 3.1% 14.1% 20.2% 37.7% 46.0% Salaries for temporary employees -0.3%-21.1%-----1,161.7% 474.5% Advertising expenses -1.9% 6.3% 18.6% -1.1% 19.8% 117.2% 24.1% 65.7% 109.4% 150.6% Rents 17.3%7.9%------Depreciation -5.7% -3.5% -10.7% 3.5% -42.5% 54.7% 25.3% 9.0% 40.9% 26.7% Commission fees -3.4% 2.9% 44.0% 32.0% 1.9% -1.2% 24.2% 19.9% 33.7% 74.9% Other -13.0% -3.5% 17.4% 52.2% -7.0% 18.5% 24.0% 24.0% 69.1% 120.0% % of revenue (SG&A ratio) 56.6% 54.4% 52.8% 48.2% 46.1% 49.2% 47.7% 48.2% 69.5% 101.7% Personnel (excl. salaries for temp. employees) 18.7% 19.1% 17.5% 15.3% 17.3% 14.7% 13.4% 11.9% 12.3% 10.3% Salaries for temporary employees 7.1% 6.6% 5.0% - - - - 0.8% 7.3% 24.1% Advert ising expenses 8.8% 8.7% 9.8% 8.1% 8.5% 15.2% 15.0% 18.3% 28.8% 41.5% Rents 2.3% 2.3% ------Depreciation 0.9% 0.8% 0.7% 0.6% 0.3% 0.4% 0.4% 0.3% 0.3% 0.2% Commission fees 3.3% 3.2% 4.3% 4.7% 4.2% 3.4% 3.4% 3.0% 3.0% 3.1% Other 15.4% 13.7% 15.4% 19.5% 15.8% 15.5% 15.3% 14.0% 17.7% 22.5% Operating profit 244 223 267 255 476 508 673 704 -247 -2,762 YoY 4.5% -8.7% 19.7% -4.4% 86.8% 6.7% 32.5% 4.5% - - OPM 19.4% 16.4% 18.7% 14.8% 24.2% 21.3% 22.6% 17.3% -4.6% -29.5% Source: Shared Research based on company data

Mail Order business

Satsuma Ebisudo, a consolidated subsidiary of Demae-can, operates a Mail Order business for restaurants (such as izakaya bars). The main feature of the business is procuring limited-edition shochu (Japanese liquor) from manufacturers, which can be custom labeled with a customer’s restaurant logo and name. The company acquired all shares in Satsuma Ebisudo in May 2013. The move was mainly aimed at gaining access to Satsuma Ebisudo’s call center infrastructure. For call center services for the Demae- can business, revenue is determined by marking up costs.

27/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Group companies

Voting rights Goodwill Amortization Main business Acquired ratio (JPYmn) period Consolidated subsidiaries Satsuma Ebisudo Mail Order 100.0% May 2013543Five years Equity-method affiliate JFD Demae-can 29.1% March 2013 Source: Shared Research based on company data

Equity-method affiliate JFD Inc. delivers boxed lunches to corporate or group locations, events, meetings, and seminars. In contrast, Demae-can focuses on services oriented toward individual consumers. So, the companies operate in different spaces.

28/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Market overview

Market size Food delivery market According the research from the Yano Research Institute, the food delivery market (broadly defined) in FY2018 was worth JPY2.1tn (+2.8% YoY). This includes not only home deliveries of freshly prepared food by restaurants (demae), but also deliveries of groceries ordered through online stores such as Ito-Yokado’s “Net Super” and other online grocery delivery services. Yano Research sees the food delivery market in Japan continuing to grow at a steady rate going forward and projects that by FY2023, the market size will reach JPY2.4tn (an increase of 13.0% compared to FY2018).

Restaurant food delivery (demae) market Research by NPD Japan shows continued growth in the restaurant food delivery market, and more than one-third of this market has the potential to use a third-party delivery service like Sharing Delivery. NPD Japan figures for 2018 put the value of the restaurant food delivery market at JPY408.4bn (+5.9% YoY), with home deliveries direct from restaurants or other shops accounting for 36% of the market and the seven largest delivery service providers (including Demae-can) accounting for 44% (with the largest of the “big seven” providers accounting for 10%, the second-largest for 9%, and the third largest for 8%).

According to the company, major delivery service operators overseas are seeing active user numbers (as a percent of total users) range from 6% in countries like the US, where the population is spread out and there are many competitors, to nearly 20% in smaller and more densely populated countries, such as the United Kingdom and South Korea. With only about 2% of its own user base being active users as of 2020, Demae-can believes that it can at least triple its active user ratio and that it may even be able to raise it by as much as ten-fold.

Affiliated restaurants Statistics from the 2018 Economic Census for Business Frame report (from the Ministry of Internal Affairs and Communications) put the total number of restaurants in Japan at 499,542. Of these, 93,787 are pubs/beer halls and 65,635 are bars/cabarets/nightclubs, i.e., drinking establishments that are unlikely to have any need for home delivery services such as Sharing Delivery. This leaves a viable potential market of some 340,120 restaurants, versus the company’s affiliated restaurant count of roughly 33,000 (as of August 31, 2020). This means the company is currently serving only about 9% of its potential market in terms of restaurants. In terms of the value of the restaurant food delivered, the company’s market share estimate of 11% for its Demae-can business is well above its market share in terms of the number of restaurants for which it provides delivery services, but this is to be expected since many of its affiliated restaurants are part of large restaurant chains and have higher sales than the average restaurant.

The company does not disclose restaurant count or revenue by food category for Demae-can. But it has said that pizza accounts for a large portion of its business; other significant categories include sushi, boxed lunches, Chinese food, Western food, curry, and hamburgers. The company believes that focusing on foods that can be eaten daily, such as boxed lunches, will help boost repeat orders. For example, family restaurant chain Gusto offers a wide selection of low-price boxed lunches (starting at about JPY500; minimum order amount, JPY1,500; free delivery); customers can easily recognize the convenience of ordering online. Outside of restaurants, other affiliated stores include stores selling alcohol or rice, supermarkets, dry cleaners, and locksmith stores, but these non-restaurants account for only a small portion of the company’s total revenue).

User demographics According to an NPD Japan survey, one of the biggest user groups of direct home delivery services from restaurants is men who are middle-aged or older (ages 30–49 accounted for 18% of users; ages 50–70 accounted for 21%). Young men formed the largest group of users for the seven largest restaurant food delivery service companies (including Demae-can; ages 15–29 accounted for 32% of users).

According to a survey conducted by Macromill, Inc. in 2018, which targeted men and women ages 20–69 who live in Tokyo and surrounding area, only 5.5% women used home delivery services from restaurants on a regular basis (two to three times a month

29/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

or more). The Macromill survey also showed that during the past year, 41.8% of the women surveyed did not use meal delivery services from restaurants, 9.0% used meal delivery services from restaurants about once a month, 14.8% once every two to three months, and 14.9% one time or less every six months.

Average spending on food

Average monthly household spending on food in Japan has generally been around JPY60,000 to JPY70,000.

Average household expenditure

(JPY'000) 0 20406080

Food

Home-related

Utilities 1999 Household appliances 2004 Clothing and shoes 2009 Healthcare 2014 Transportation and communication

Education

Entertainment

Other consumption spending

Source: Shared Research based on the National Survey of Family Income and Expenditure, Ministry of Internal Affairs and Communications (MIC)

Externalization ratio

The ratio of spending on restaurant meals to total household spending on food peaked in the second half of the 1990s and has been trending down thereafter, whereas the ratio of spending on food prepared outside the home, including restaurant meals, take-out lunch boxes (bento), and ready-to-eat supermarket take-home meals to total household spending on food (externalization ratio), has been constant. We can thus surmise that spending on take-out meals such as bento and supermarket take-outs is on the rose. In the sense that delivered food from restaurants can be ordered for consumption at home, the workplace, or other venues, delivered food from restaurants is more similar to ready-to-eat meals sold in stores than to dine-in food served in restaurants, which suggests that demand for restaurant food delivery has been trending higher over the years.

Ratio of spending on restaurant meals to total household spending on food, and meal outsourcing ratio (includes take-out meals)

50%

45%

40%

35%

30% Food externalization ratio (incl. bento) 25% Eating out ratio 20%

15%

10%

Source: Shared Research based on “Food Service Market Size Estimate 2019” released by the Japan Food Service Association (JF)

30/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Preferential consumption tax rate for take-out and delivered restaurant food

When the consumption tax rate went up to 10.0% on October 1, 2019, the tax rate on restaurant food also went up to 10.0% in the case of dine-in service. However, the consumption tax rate on take-out and delivered meals remained at the old consumption tax rate of 8.0%, giving take-out and delivered meals a slight advantage over dine-in meals in terms of taxes.

31/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Information on competitors Information on competitors in Japan Direct competitors in Japan include the delivery business of Uber Technologies, Inc. (NYSE: UBER), menu, Inc. (unlisted), and Rakuten Delivery (Rakuten, Inc., TSE1: 4755). The company’s competitors operate several businesses in multiple regions or are unlisted. As a result, there is limited disclosure of data regarding the delivery businesses of the company’s competitors in Japan.

▷ Because there is a big first-mover advantage, the company is working to establish a foothold ahead of others. Although the company is striving to increase everyday demand, the food delivery industry in Japan is still based on “special occasions” demand. Cultural differences such as the prevalence of double-income households and whether people make a habit of cooking on weekdays seem to have a large influence on demand. However, the take-up and awareness of delivery services is burgeoning in Japan under the influence of the COVID-19 pandemic in 2020. ▷ According to materials disclosed by Uber Technologies, Inc. (NYSE: UBER), growth in gross bookings in Japan for its delivery business in Q2 FY12/20 approached 400% YoY. However, it also noted that it was loss-making at an adjusted EBITDA level. As of October 2020, Uber fees were set at 35% of order cost (payment processing fees separate). Uber Technologies, Inc. has many young users and those living in single-person households. It tends to have large order volume despite having a low customer spend. On the other hand, families compose a significant part of Demae-can’s user base, and a lot of the demand is for special occasions. The Uber model focuses on delivery carried out by the company. Thus, it does not support delivery by affiliated restaurants, and mainly does business in densely populated areas. By contrast, Demae-can supports affiliated restaurants that

conduct in-house delivery along with its Sharing Delivery platform, which enables it to operate in regional areas. Uber, which accumulates data overseas in addition to Japan, is ahead of the company in terms of personalization. ▷ Convenience stores can be considered competitors in a broad sense. There are over 57,000 convenience stores in Japan (Japan Franchise Association, FY2019 Franchise Chain Statistical Survey). Convenience stores are generally located in very convenient places and are typically open twenty-four hours a day, meaning consumers can buy food items such as bento boxes (prepared meals to be eaten on-the-go) at any time they please. However, since convenience stores are retailers and do not generally

offer delivery services, their core value proposition differs from that of food delivery services.

Reference: Comparable overseas companies Comparable overseas companies include Uber Technologies, Inc. in the US, Just Eat Takeaway.com N.V. (Euronext: TKWY) in the Netherlands, Delivery Hero SE (Frankfurt Stock Exchange: DHER) in Germany, and DoorDash, Inc. in the UK. is there. For quarterly data on these companies, see the Reference: Comparable overseas companies section.

In recent years, there have been a number of corporate takeovers among similar companies overseas, and an intensifying trend toward oligopolies. In June 2020, Just Eat Takeaway.com N.V. (Euronext: TKWY) announced that it had agreed to acquire Grubhub, Inc. (NYSE: GRUB), which had the second highest market share in the US as of April 2020 (23% market share according to research house Second Measure), for USD7.3bn (about JPY781.0bn). In July 2020, the No.3 player (Uber Technologies, Inc., 22% share), announced that it had agreed to acquire the No.4 player, Postmates Inc. (not listed, 8% share) for roughly USD2.7bn (about JPY284.5bn).

32/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Strengths and weaknesses

Strengths

Strengthening capital/business alliance with LINE group allows Demae-can to draw on its management resources as well In March 2020, the company announced that it had entered into an agreement to strengthen its capital and business alliance with the LINE group. With the strengthening of the ties between the two companies, going forward, Demae-can will be drawing upon the management resources of the LINE group in a number of different ways, including (1) making use of LINE’s LINE ID service, (2) procuring funding for growth-oriented investments, (3) procuring additional personnel from LINE to help with systems development work and marketing, and (4) receiving support that will enable the expansion of its takeout food delivery service into new territories. By combining its own ID system with LINE ID to create a new ID system known as “ONE ID,” Demae- can hopes to make it easy for the 84mn LINE users to make use of its takeout food delivery service. With the JPY30bn in new equity capital it will receive from the issuance of new shares, Demae-can will have the funds to finance spending on systems development work, establish more delivery bases, and step up its marketing. In additional to the financial backing from LINE, Demae-can will also be able to draw upon LINE’s human resources to help with systems development and marketing. Furthermore, because LINE operates its own takeout food delivery service (under the name Pockeo), Demae-can is also expecting to generate synergies as it merges the operations of LINE’s delivery service with its own operations.

Delivery bases (Sharing Delivery bases) expand coverage and boost service efficiency and quality In addition to the delivery bases the company manages directly (Sharing Delivery bases), the company’s network includes delivery bases that are run by partner companies and companies with which it has business alliances. The company can expand its coverage more quickly than competitors who mainly rely on individual operators (gig workers) for deliveries. Further, by maintaining delivery bases that it manages directly, the company is able to experiment with different ways of improving service efficiency and quality, expanding functional systems throughout the rest of its delivery network.

Strong brand recognition According to the company’s research, in FY08/20, running TV commercials and increasing its transport advertising boosted awareness of Demae-can by 12.4pp from July 2020, before the commercials, to 69.6% in late August. Due to increased brand recognition, Demae-can is first in mind when potential customers consider food delivery, increasing the likelihood of future growth in the number of active users and orders.

Weaknesses

Heavy investment needed to establish delivery bases (Sharing Delivery bases) In the case of each directly managed delivery base, the company rents the building, as well as one or two motorbikes and five to six electric bicycles for use in making deliveries. With this very substantial investment, the company expects each directly managed base to incur a cumulative loss of some JPY20–30mn during its first 10–15 months in operation. Because new additions to the company’s delivery service network will be directly managed, the investments needed during the early stages of its delivery network expansion will impose a heavy burden.

Low customer acquisition and service efficiency due to relatively low repeat order rate The company no longer discloses the repeat order rate (but did in FY08/20 and before), but it is possible to estimate the metric by dividing the number of orders by the number of active users. The estimated repeat order rate was 9.5x p.a. in FY08/20 (unchanged from 9.5x p.a. in FY08/19). While this represents an increase from 7.1x p.a. in FY08/16 (earliest date for which the figure is calculable), active users order on average less than once a month, well short of the company’s ambition of making food delivery an everyday occurrence. Further, a relatively low repeat order rate makes it difficult to boost the efficiency of customer acquisition and delivery.

Company strengths difficult to leverage overseas The enhanced capital and business alliance with the LINE group should have major benefits in Japan, but the LINE app has significant market share in only a few countries overseas. Furthermore, its delivery bases (Sharing Delivery bases) are domestic.

33/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

The company will have to build brand recognition overseas from the ground up. Demae-can has ambitions to become the No. 1 player in food delivery volume handled in Asia. However, if it mounts a full-scale foray overseas following the end of the current medium-term plan in FY08/23, it will likely come up against powerful competitors.

34/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Historical performance

Income statement

Income statement FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Par. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Revenue 1,259 1,360 2,087 3,558 3,661 4,155 4,944 5,431 6,666 10,306 YoY 8.8% 8.0% 53.5% 70.5% 2.9% 13.5% 19.0% 9.8% 22.7% 54.6% Cost of revenue 302 399 759 1,518 1,375 1,503 1,720 2,020 2,470 3,024 Cost ratio 24.0% 29.4% 36.4% 42.7% 37.6% 36.2% 34.8% 37.2% 37.0% 29.3% Gross profit 957 960 1,328 2,040 2,286 2,652 3,223 3,410 4,196 7,283 GPM 76.0% 70.6% 63.6% 57.3% 62.4% 63.8% 65.2% 62.8% 63.0% 70.7% SG&A expenses 713 750 1,050 1,678 1,740 2,079 2,423 2,573 4,236 9,906 Personnel expenses 325 353 416 622 688 796 962 887 1,437 - Personnel (excl. salaries for temp. employees) 236 264 313 447 502 555 781 676 859 - Advertising expenses 111 118 166 280 313 464 537 834 1,633 - Rents 2933455249709496140- Depreciation 12 12 48 132 129 146 164 96 35 - Commission fees 42 45 81 127 125 127 144 157 195 - Other 283 278 397 640 622 718 703 714 1,374 - YoY 8.0% 5.1% 40.0% 59.9% 3.6% 19.5% 16.5% 6.2% 64.6% 133.9% Personnel expenses - 8.7% 17.9% 49.3% 10.7% 15.6% 20.9% -7.8% 62.0% - Personnel (excl. salaries for temp. employees) -3.1% 11.8% 18.6% 42.9% 12.3% 10.5% 40.8% -13.4% 27.0% - Advertising expenses -1.9% 6.5% 40.2% 68.6% 11.6% 48.3% 15.9% 55.3% 95.7% - Rents 17.3% 12.5% 35.0% 16.5% -5.7% 41.9% 35.4% 2.0% 45.1% - Depreciation -5.7% -3.5% 319.5% 172.1% -2.0% 13.6% 11.9% -41.3% -63.2% - Commission fees -3.4% 7.9% 79.9% 57.4% -1.5% 1.3% 13.4% 8.9% 24.4% - Other 27.1% -1.8% 42.8% 61.3% -2.9% 15.5% -2.2% 1.5% 92.5% - SG&A ratio (% of revenue) 56.6% 55.1% 50.3% 47.2% 47.5% 50.0% 49.0% 47.4% 63.5% 96.1% Personnel expenses 25.8% 26.0% 20.0% 17.5% 18.8% 19.1% 19.5% 16.3% 21.6% - Personnel (excl. salaries for temp. employees) 18.7% 19.4% 15.0% 12.6% 13.7% 13.3% 15.8% 12.5% 12.9% - Advertising expenses 8.8% 8.7% 8.0% 7.9% 8.5% 11.2% 10.9% 15.4% 24.5% - Rents 2.3% 2.4% 2.1% 1.5% 1.3% 1.7% 1.9% 1.8% 2.1% - Depreciation 0.9% 0.8% 2.3% 3.7% 3.5% 3.5% 3.3% 1.8% 0.5% - Commission fees 3.3% 3.3% 3.9% 3.6% 3.4% 3.1% 2.9% 2.9% 2.9% - Other 22.5% 20.4% 19.0% 18.0% 17.0% 17.3% 14.2% 13.1% 20.6% - Operating profit 244 211 278 362 547 573 801 837 -39 -2,623 YoY 4.5% -13.7% 32.2% 30.0% 51.1% 4.8% 39.8% 4.6% - - OPM 19.4% 15.5% 13.3% 10.2% 14.9% 13.8% 16.2% 15.4% -0.6% -25.5% Non-operating income (expenses) 16 10 -4 4 -5 6 -3 12 32 -297 Net financial income 15 9 0 -5 -3 -1 -16 2 1 1 Gains on forex and derivatives - 1 -2 0 -6 -1 0 -3 0 0 Equity in earnings of affiliates - - -2 -3 0 4 11 19 26 12 Other 11111452-65-309 Recurring profit 260 221 275 366 541 579 798 849 -7 -2,920 YoY 8.7% -15.2% 24.5% 33.1% 48.1% 7.0% 37.8% 6.4% - - RPM 20.6% 16.2% 13.2% 10.3% 14.8% 13.9% 16.1% 15.6% -0.1% -28.3% Extraordinary gains (losses) -2 -1 -79 -1 -322 35 -107 -9 -18 -1,057 Income taxes 113 104 99 198 122 273 261 282 79 136 Implied tax rate 43.6% 47.6% 50.7% 54.3% 55.8% 44.5% 37.7% 33.6% -317.7% -3.4% Net income attributable to non-controlling interests ---00-6-2-1-- Net income attributable to owners of parent 146 115 97 167 97 348 433 559 -103 -4,112 YoY 18.7% -21.2% -16.0% 73.1% -42.0% 258.4% 24.4% 29.1% - - Net margin 11.6% 8.5% 4.6% 4.7% 2.6% 8.4% 8.8% 10.3% -1.5% -39.9% Capit al expenditures 312 239 95 90 235 293 329 362 431 569 Depreciation 84 139 154 166 181 195 181 176 246 322 Depreciation (SG&A expenses) 12 12 48 132 129 146 164 96 35 - Goodw ill amort izat ion (excl. extraordinary losses) - - 36 113 114 125 133 69 - - EPS (JPY) 28.3 22.3 18.8 17.1 9.7 34.5 10.7 13.8 -2.5 -73.9 EPS (fully diluted; JPY) 28.0 22.0 18.3 16.7 9.6 33.4 10.3 13.5 - - Dividend per share (JPY) 11.5 7.0 8.0 5.0 7.0 10.0 3.3 3.6 3.6 - Payout ratio 40.7% 31.4% 42.6% 29.2% 72.4% 29.0% 30.8% 26.1% - - DOE 2.9% 1.7% 1.9% 2.4% 3.4% 4.5% 5.3% 4.9% 4.8% - Book value per share (JPY) 406.8 419.9 414.3 203.3 212.3 229.7 66.7 80.4 68.9 346.4 EBITDA 328 349 432 528 728 768 982 1,013 207 -2,301 YoY 4.5% 6.6% 23.6% 22.3% 37.8% 5.5% 27.9% 3.1% -79.6% - EBITDA margin 26.0% 25.7% 20.7% 14.8% 19.9% 18.5% 19.9% 18.7% 3.1% -22.3% ROE 7.1% 5.4% 4.6% 8.4% 4.7% 15.6% 17.3% 18.8% -3.4% -26.3% Net margin 11.6% 8.5% 4.6% 4.7% 2.6% 8.4% 8.8% 10.3% -1.5% -39.9% Total asset turnover 0.57 0.58 0.78 1.19 1.20 1.16 1.16 0.99 0.98 0.48 Financial leverage 1.08 1.09 1.28 1.49 1.47 1.61 1.70 1.84 2.24 1.38 ROA (RP-based) 11.8% 9.5% 10.3% 12.2% 17.7% 16.1% 18.8% 15.5% -0.1% -13.6% ROIC 7.0% 5.8% 7.4% 9.2% 14.5% 14.4% 18.9% 16.3% 0.3% 5.4% NOPAT 145 125 173 224 352 383 536 560 13 867 Net assets + Interest-bearing debt 2,058 2,155 2,330 2,436 2,423 2,664 2,843 3,436 3,860 16,062 Source: Shared Research based on company data

35/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Since Q3 FY08/20, amid a tough climate for the restaurant industry due to the COVID-19 outbreak, the company has grown revenue sharply by responding to demand for delivery from restaurants and consumers (revenue was up 73.3% YoY in Q3 and 91.5% YoY in Q4). At the same time, the company incurred upfront spending, such as the expense of setting up delivery bases (Sharing Delivery bases) and advertising. In FY08/20, it reported gross merchandise volume of JPY102.7bn (+31.0% YoY), revenue of JPY10.3bn (+54.6% YoY), and an operating loss of JPY2.6bn (an operating loss of JPY39mn in FY08/19). In addition, the amount of “other salaries” under SG&A expenses increased sharply in FY08/20 as a result of spending to strengthen delivery personnel.

36/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Balance sheet

Balance sheet FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Par. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Current assets 1,032 879 1,650 1,659 1,938 2,578 3,520 5,293 5,556 35,580 Cash and cash equivalents 792 651 1,258 1,200 1,372 1,720 2,263 2,928 2,186 28,966 Accounts receivable 148 149 182 233 245 324 408 350 221 135 Inventories - -58495761586162- Accounts receivable–other 65 68 120 140 225 406 736 1,865 2,995 6,376 Deferred tax assets 209131819212323- - Allowance for doubtful accounts -13 -11 -9 -9 -8 -11 -4 -4 -58 -72 Other 2014272929573669150176 Tangible fixed assets 20 11 42 55 83 109 79 123 162 51 Depreciable and lease assets 2022831286129504516 Land 000000000 - Intangible assets 504 588 948 778 651 1,092 521 604 822 10 Software 341 570 412 330 276 394 446 588 742 9 Software in progress 163 18 29 25 85 90 6 16 80 - Goodwill - - 507 423 290 607 69 - - - Other 0 -00000000 Investments and other assets 749 880 322 516 435 288 320 499 545 344 Investment securities 672 817 255 434 248 138 196 348 374 183 Lease and guarantee deposits 19 24 29 39 86 75 63 115 120 111 Deferred tax assets 5738638754138141613 Allowance for doubtful accounts 0 -1 -2 -1 -1 -1 -1 0 -2 -2 Other 2 2 34 7 27 36 23 22 36 39 Fixed assets 1,273 1,478 1,313 1,348 1,169 1,488 919 1,226 1,529 406 Total assets 2,305 2,357 2,962 3,007 3,107 4,066 4,439 6,519 7,084 35,986 Current liabilit ies 191 160 579 687 751 1,332 1,698 3,165 4,203 7,462 Accounts payable - - 176 136 135 139 112 99 88 54 Short-term debt and commercial papers ------800800 - Current portion of long-term debt - - 101 107 105 207 75 4 4 - Accounts payable–other 112 91 188 211 327 717 1,207 1,986 3,070 6,867 Income taxes payable 67 40 62 111 85 148 152 100 49 201 Provision for bonuses - 5 12 19 18 12 26 33 50 82 Ot her current liabilit ies 12 24 41 103 82 109 127 143 143 257 Fixed liabilit ies - - 396 300 211 392 28 69 41 44 Long-term debt - - 376 280 188 341 8 4 - - Other - -2120235121654144 Tot al liabilit ies 191 160 976 986 962 1,724 1,726 3,233 4,244 7,506 Net assets 2,114 2,197 1,987 2,021 2,146 2,342 2,713 3,269 2,840 28,480 Shareholders' equity 2,180 2,249 1,951 2,052 2,137 2,321 2,667 3,097 2,657 28,427 Capital stock 1,107 1,113 1,113 1,113 1,113 1,113 1,113 1,113 1,113 16,113 Capital surplus 658 664 664 664 664 615 635 637 651 15,645 Retained earnings 654 710 755 792 799 1,057 1,388 1,813 1,562 -2,697 Treasury stock -240 -239 -581 -518 -439 -464 -469 -467 -670 -634 Valuation and translation adjustments -81 -66 34 -41 - -4 31 159 162 50 Valuation differences on securities -81 -65 33 -43 - -7 27 158 162 50 Foreign currency translation adjustments 0-112-341-- Subscription rights to new shares 15 14 1 11 8 17 8 7 21 2 Non-cont rolling int erest s - - - 0 - 8 6 6 - - Total equity and liabilities 2,305 2,357 2,962 3,007 3,107 4,066 4,439 6,519 7,084 35,986 Capital expenditures 312 239 95 90 235 293 329 362 431 - Depreciation 84 139 154 166 181 195 181 176 246 322 Amortization of goodwill - - 36 113 114 125 133 69 - - Working capital 148 149 65 145 167 245 354 312 195 81 Adjusted shareholders' equity 2,099 2,183 1,986 2,010 2,137 2,317 2,698 3,256 2,819 28,477 Total interest-bearing debt - - 476 387 293 548 83 808 804 - Net cash 792 651 781 813 1,079 1,171 2,180 2,121 1,382 28,966 Days in accounts receivable 46.2 39.9 29.0 21.3 23.8 25.0 27.0 25.5 15.6 6.3 Days in inventory - - 14.0 12.8 14.0 14.3 12.6 10.8 9.1 3.7 Days in accounts payable - - 42.3 37.5 36.0 33.3 26.7 19.0 13.8 8.6 Cash conversion cycle (days) 46.2 39.9 0.7 -3.4 1.9 6.0 13.0 17.2 10.9 1.5 Current ratio 540% 548% 285% 242% 258% 194% 207% 167% 132% 477% Fixed ratio 60.7% 67.7% 66.1% 67.1% 54.7% 64.2% 34.1% 37.7% 54.2% 1.4% Equity ratio 91.0% 92.6% 67.0% 66.8% 68.8% 57.0% 60.8% 49.9% 39.8% 79.1% Source: Shared Research based on company data

Cash and deposits, borrowings In FY08/20, the company raised JPY30.0bn under its enhanced business and capital alliance with LINE Corp. It repaid outstanding borrowings, making it debt-free, and increased cash and deposits to JPY29.0bn.

37/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Accounts receivable–trade (current assets), accounts payable–trade (current liabilities) Accounts receivable–trade and accounts payable–trade are mostly centered on the Mail Order business. Demae-can does not keep inventory and does not have a structure under which working capital increases in tandem with revenue growth. In addition, the company collects order processing and other fees from affiliated stores at the end of the month following the month when orders were placed.

Accounts receivable–other (current assets) and accounts payable–other (current liabilities) As revenue expands, reward points, point system usage fees, and payment processing fees also grow; this in turn drives increases in accounts payable–other (payments to point companies, settlement companies) and accounts receivable–other (receipt of related fees from stores). Expansion in gross merchandise volume coupled with a higher share of online payments leads to an increase in accounts payable–other.

38/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Cash flow statement

Cash flow statement FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Par. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Pre-tax profit 259 219 196 365 219 614 691 840 -25 -3,976 Depreciation 84 139 154 166 181 195 181 176 246 322 Amortization of goodwill - - 36 113 114 125 133 69 - - Impairment losses - 3 84 1 41 30 37 12 - 1,157 Gains (losses) on disposal and valuation of fixed assets - 0 10 1 4 1073-490 Gains (losses) on disposal and valuation of securities - - -23 4 268 -91 4 0 - -100 Increase (decrease) in allowance for doubtful accounts 4 -1 -2 -1 -1 -2 -3 0 55 15 Interest and dividend income -15-9-1-1-1-3-3-3-30 Interest expenses --254519122 Gains (losses) on foreign exchange --151-1030- Equit y in earnings (losses) of affiliat es - - 2 3 0 -4 -11 -19 -26 -12 Decrease (increase) in accounts receivable–trade 23 -1 40 -49 -11 -57 -110 58 95 86 Decrease (increase) in inventories - - 7 13 -6 -8 10 -3 0 14 Increase (decrease) in accounts payable–trade 16 1 -77 -39 -2 -16 -7 -13 -11 -34 Decrease (increase) in accounts receivable–other ------171-334-1,127 -1,130 -3,381 Increase (decrease) in accounts payable-other - - - - - 307 578 745 1,076 3,767 Other -56 14 -53 49 -1 -80 85 -24 34 634 Subtotal 315 363 381 632 810 855 1,342 710 322 -1,506 Interest and dividends income received 215811355911 Interest expenses paid - - -2 -5 -4 -5 -19 -1 -2 -2 Income taxed paid (refunded) -68 -120 -70 -146 -213 -180 -284 -282 -230 -2 Cash flows from operating activities 249 259 318 481 594 673 1,045 433 98 -1,499

Change in t ime deposits 500--10------Change in investment securities - -110 719 -336 -48 100 - 52 - 134 Purchase of tangible fix assets -6 -2 -5 -21 -52 -15 -20 -76 -80 -2 Proceeds from sales of tangible fixed assets --100------Purchase of intangible fixed assets -306 -237 -106 -53 -162 -269 -264 -267 -397 -535 Proceeds from cancellation of insurance funds --5543------Payments and collection of loans receivable - -35 1 --9 0 - - - Payments for guarantee deposits - - - -29 -47 24 - -51 -7 41 Purchase of inv estments in subsidiaries resulting in change in scope of consolidation - - -501 -23 - 26 -11 - -10 0 Other -2 -5 1 17 -3 -2 -3 -10 -7 -88 Cash flows from investing activities 186 -354 207 -391 -313 -145 -298 -353 -501 -449

Increase (decrease) in long-term debt - - 476 -104 -94 -105 -105 -75 -4 -4 Proceeds from share issuance - 12 ------0 29,674 Purchase of treasury shares - - -370 -101 - -41 -29 0 -300 0 Proceeds from disposal of treasury shares - 1 12 74 38 24 32 3 98 29 Cash dividends paid -46 -59 -36 -38 -49 -71 -101 -134 -146 -147 Other - - -10 -1 -1 -2 -2 797 13 -823 Cash flows from financing activities -46 -46 72 -170 -106 -194 -205 591 -339 28,729

Effect of exchange rate on cash and cash equivalents -000-251-600 Increase (decrease) in cash and cash equivalents 389 -141 597 -79 172 340 543 665 -742 26,780 Cash and cash equivalents (beginning of year) 403 792 651 1,248 1,200 1,372 1,720 2,263 2,928 2,186 C hange in cash and cash equiv alents resulting from changes to the scope of consolidation ---30-8---- Cash and cash equivalents (year-end) 792 651 1,248 1,200 1,372 1,720 2,263 2,928 2,186 28,966 Source: Shared Research based on company data

Cash flows from operating activities In FY08/20, cash flows from operating activities turned negative due to investments in setting up delivery bases (Sharing Delivery bases) and advertising.

Cash flows from investing activities Capital investment is mainly geared toward software for system development.

Cash flows from financing activities In FY08/20, the company raised JPY30.0bn under its enhanced business and capital alliance with LINE Corp. and increased cash and deposits to JPY29.0bn.

39/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Other information

ESG-related

Corporate governance (as of November 26, 2020) Form of organization and capital structure Form of organization Company with Audit & Supervisory Board Controlling shareholder and parent company None Directors and Audit & Supervisory Board members Number of directors under Articles of Incorporation 10 Number of directors 7 Directors' terms under Articles of Incorporation 1 Chairman of the Board of Directors President Number of outside directors 2 Number of independent outside directors 2 Number of members of Audit & Supervisor Board under Articles of Incorporation 4 Number of members of Audit & Supervisor Board 4 Number of outside members of Audit & Supervisory Board 3 Number of independent outside members of Audit & Supervisory Board 3 Other Participation in electronic voting platform Y Providing convocation notice in English None Implementation of measures regarding director incentives Stock option plan Eligible for stock option Inside directors, employees Disclosure of individual director's compensation None Policy on determining amount of compensation and calculation methodology In place Corporate takeover defenses None

Source: Shared Research based on company data

Shareholder returns

At present, the company is looking to rapidly expand operations, strengthen its management infrastructure, and improve management efficiency as part of an overall effort to increase its enterprise value. Meanwhile, its basic stance towards shareholder return calls for maintaining consistent and stable dividends. Towards this end, the company is looking to sustain stable dividends while keeping its dividend payout ratio around 30%, even as it pushes forward with aggressive investment plans.

Dividend-related indicators Shareholder returns FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Par. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Total dividends a) 59 36 38 49 70 100 133 145 147 - Total treasury stock acquired b) - - 370 101 - 41 29 0 300 - Total returns to shareholders c) = a) + b) 59 36 408 150 70 141 162 145 447 - Net income attributable to owners of parent d) 146 115 97 167 97 348 433 559 -103 -4,112

Dividend payout ratio a) / d) 40.4% 31.3% 39.3% 29.3% 72.2% 28.8% 30.7% 26.0% - - Total shareholder payout ratio c) / d) 40.4% 31.3% 422.0% 89.8% 72.2% 40.5% 37.4% 26.0% - -

Shareholders' equity (year-end) 2,114 2,197 1,987 2,021 2,146 2,342 2,713 3,269 2,840 28,480 FY averagef) 2,058 2,155 2,092 2,004 2,083 2,244 2,527 2,991 3,054 15,660 EPS (JPY) 28.3 22.3 18.8 17.1 9.7 34.5 10.7 13.8 -2.5 -73.9 EPS (fully dilut ed) (JPY) 28.0 22.0 18.3 16.7 9.6 33.4 10.3 13.5 - - Dividend per share (JPY) 11.5 7.0 8.0 5.0 7.0 10.0 3.3 3.6 3.6 - DOE a) / f) 2.9% 1.7% 1.8% 2.4% 3.4% 4.5% 5.3% 4.8% 4.8% - Source: Shared Research based on company data

40/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Top management

In order to foster a closer working relationship with LINE Corp. through the capital and business alliance and strengthen its management structure, LINE Corp. executive officer and CEO at O2O Company Hideo Fujii assumed the position as the Demae- can president and representative director. Demae-can chairman and representative director Rie Nakamura will resign at the conclusion of the annual general meeting of shareholders scheduled to be held on November 26, 2020 due to the expiration of her term of office. As a result, the company will have only one representative director, Hideo Fujii, CEO. After the general meeting of shareholders, Ms. Nakamura will serve as an executive advisor to the company and will be involved in advising on organizational management as well as activities to expand the delivery industry.

President and Representative Director: Hideo Fujii (born November 1, 1976) Joined Rakuten, Inc., in June 2006. Appointed manager, merchant strategy group, planning department at Rakuten in 2011, and group manager of food drinking strategy group, planning department at Rakuten in 2012. He was named group manager of international search strategy group, international department, Rakuten in 2014, and director at Rakuten Mart, Inc., in 2015. In 2016 he joined LINE Corporation, and was appointed executive officer in 2017 (current position). In 2017, he was named director of Yume no Machi Souzou Iinkai Co., Ltd (currently Demae-can Co., Ltd.) In 2018 he was named director of Venture Republic Inc. (current position). In 2019 he was appointed CEO of LINE Corporation O2O Company (current position). Became president of Demae-can in June 2020 (current role).

Hideo Fujii

Source: Company photo

History

Date September 1999 Yume no Machi Souzou Iinkai Co., Ltd. established in Suminoe, Osaka October 2000 Launched Demae-can delivery website July 2004 Launched Mobile Demae-can delivery w ebsit e June 2006 Listed on the Hercules market of the Osaka Securities Exchange (ticker: 2484) October 2010 Changed listing to the JASDAQ market of the Tokyo Stock Exchange (due to market integration) November Number of Demae-can affiliated restaurants exceeded 10,000 May 2013 Made Satsuma Ebisudo Co., Ltd. a subsidiary December Reorganized Tokyo office to Tokyo branch (now Tokyo headquarters) March 2014 Relocated Osaka headquarters to Chuo, Osaka May Made PT Klik Eat Indonesia a subsidiary January 2016 Relocated Tokyo branch (now Tokyo headquarters) to Chiyoda, Tokyo February Reorganized Tokyo branch, converting it into the Tokyo headquarters starting a dual headquarters structure October Signed capital and business alliance with LINE Corporation November Selected as a component of the J-Stock Index by the Tokyo Stock Exchange June 2017 Number of Demae-can affiliated restaurants exceeded 15,000 November 2019 Renamed to Demae-can Co., Ltd. from Yume no Machi Souzou Iinkai Co., Ltd. March 2020 St rengt hened capit al and busines alliance w it h LINE Corporation

41/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Major shareholders (as of August 31, 2020)

Shareholding Top shareholders Shares held ratio

LINE Corporation 29,428,000 35.79% Mirai Fund LLP 20,548,000 24.99% Toshie Nakamura (official name: Toshie Nishimura) 5,494,000 6.68% BNYM SANV BNYM GCM Client Accounts M ILM FE 2,791,385 3.40% (Standing proxy: MUFG Bank, Ltd.) The Bank of New York 140051 2,027,400 2.47% (Standing proxy: Mizuho Bank, Ltd. Settlement Department) The Bank of New York 133652 1,493,900 1.82% (Standing proxy: Mizuho Bank, Ltd. Settlement Department) MLI For Client General Omni Non Collat eral Non T reat y PB 1,264,900 1.54% Goldman Sachs Int ernat ional 1,229,095 1.49% (Standing proxy: Goldmand Sachs Securities Co., Ltd.) The Master Trust Bank of Japan, Ltd. (Trust account) 1,111,700 1.35% JP Morgan Chase Bank 385632 1,082,800 1.32% (Standing proxy: Mizuho Bank, Ltd. Settlement Department) SUM 66,471,180 80.85% Source: Shared Research based on company data

Employees

FY08/02 FY08/03 FY08/04 FY08/05 FY08/06 FY08/07 FY08/08 FY08/09 FY08/10 FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 Cons.No. of employees 64708990160142159183312 Demae-can -364545125101115139267 Mail Order -2632333541444445 Company-wide -81212----- Osaka branch 211923273239482720262420252830 Tokyo head office ---2021151117353140526185171 Satsuma Ebisudo ------2632333541444445 Other 91221--25-2-6129292666 Cons.No. of temporary employees 39828187274951244232,595 Demae-can -311461735333342,510 Mail Order -51678110190918985 Company-wide ------Osaka branch 23211517304339311466231030 Tokyo head office ------3301357 Satsuma Ebisudo ------51678110190918985 Other 111------167--3112,423 Par. No. of employees 8 8 13 17 30 31 44 47 53 56 62 44 55 57 64 72 86 139 267 Temporary employees 242216173043393114665333342,510 Average age 31.431.731.731.631.832.132.331.931.832.231.832.233.0 35.5 34.5 Average years of service 1.31.51.71.82.42.93.13.02.72.82.83.23.12.52.2 Average annual salary (JPYmn) 3.723.944.244.554.364.474.364.974.784.895.235.225.555.635.61 Cons-Parent diff. (no. of employees) 22634339670734445

(JPYmn) FY08/02 FY08/03 FY08/04 FY08/05 FY08/06 FY08/07 FY08/08 FY08/09 FY08/10 FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 Parent Revenue ... a 88 101 145 361 649 762 941 1,074 1,158 1,259 1,360 1,427 1,717 1,965 2,381 2,976 4,057 5,395 9,375 Operating profit ... b -34 -36 -75 32 170 229 262 173 234 244 223 267 255 476 508 673 704 -247 -2,762 No. of employees (average)... c8 8111524313846505559535056616879113 203 Incl. temporary employees... d4 81115365457627491100887266677498296 1,625 Revenue per employee ... a/c 11.0 12.7 13.8 24.1 27.6 25.0 25.1 23.6 23.2 23.1 23.0 26.9 34.7 35.1 39.3 43.8 51.3 48.0 46.2 Incl. temporary employees ... a/d 22.0 12.7 13.8 24.1 18.3 14.2 16.6 17.3 15.8 13.8 13.6 16.2 23.8 29.8 35.8 40.5 41.4 18.2 5.8 OP per employee ... b/c -4.2 -4.5 -7.1 2.1 7.2 7.5 7.0 3.8 4.7 4.5 3.8 5.0 5.1 8.5 8.4 9.9 8.9 -2.2 -13.6 Incl. temporary employees ... b/d -8.4 -4.5 -7.1 2.1 4.8 4.3 4.6 2.8 3.2 2.7 2.2 3.0 3.5 7.2 7.6 9.2 7.2 -0.8 -1.7

(JPYmn) FY08/02 FY08/03 FY08/04 FY08/05 FY08/06 FY08/07 FY08/08 FY08/09 FY08/10 FY08/11 FY08/12 FY08/13 FY08/14 FY08/15 FY08/16 FY08/17 FY08/18 FY08/19 FY08/20 Cons.Revenue ... a 1,3602,0873,5583,6614,1554,9445,4316,666 10,306 Operating profit ... b 211278362547573801837-39-2,623 No. of employees (average)... c 60678090125151151171248 Incl. temporary employees... d 101128161174306336260445 1,757 Revenue per employee ... a/c 22.731.144.840.933.232.736.1 39.0 41.6 Incl. temporary employees... a/d 13.516.422.121.113.614.7 20.9 15.0 5.9 OP per employee ... b/c 3.54.24.66.14.65.35.6-0.2-10.6 Incl. temporary employees... b/d 2.12.22.23.21.92.43.2-0.1 -1.5 Source: Shared Research based on company data

42/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Historical performance, news and topics Historical performance

Full-year FY08/20 results Overview

▷ In full-year FY08/20, the company reported gross merchandise volume of JPY102.7bn (+31.0% YoY), revenue of JPY10.3bn (+54.6% YoY), an operating loss of JPY2.6bn (versus loss of JPY39mn in FY08/19), a recurring loss of JPY2.9bn (versus loss of JPY7mn in FY08/19), and a net loss attributable to owners of the parent of JPY4.1bn (versus loss of JPY103mn in FY08/19). Profits were significantly lower YoY due to investment to expand the market share of the Demae-can business. ▷ Extraordinary loss (impairment loss): The company booked an impairment loss of JPY1.2bn in the Demae-can business upon reviewing recoverability of assets based on its new medium-term management plan and in consideration of the business environment going forward. ▷ In Q4 FY08/20, the company reported revenue of JPY3.5bn (+91.5% YoY), an operating loss of JPY1.0bn (versus loss of JPY210mn in Q4 FY08/19), a recurring loss of JPY1.0bn (versus loss of JPY202mn in Q4 FY08/19), and a net loss attributable to

owners of the parent of JPY2.2bn (versus loss of JPY97mn in Q4 FY08/19). ▷ Leading KPIs in the Demae-can business: In Q4, the number of orders reached 11.0mn (+45.9% YoY), the number of affiliated restaurants 33,000 (+65.7% YoY), and the number of active users 3.9mn (+30.7% YoY). There were 384 delivery bases

(Sharing Delivery bases), up 48 versus end-May 2020. ▷ FY08/21 forecast: The company forecasts full-year gross merchandise volume of JPY160.0bn (+56.0% YoY), revenue of JPY28.0bn (+171.7% YoY), an operating loss of JPY13.0bn (versus loss of JPY2.6bn in FY08/20), a recurring loss of 13.0bn

(versus loss of JPY2.9bn), and a net loss attributable to owners of the parent of JPY13.0bn (versus loss of JPY4.1bn in FY08/20). The company sees FY08/21 as a period to prioritize investments to build the foundation of its business and plans to move forward with substantial investments. Additionally, it left its dividend forecast undetermined. ▷ Medium-term management plan: On March 26, 2020, the company announced that it had entered a business and capital alliance agreement with LINE Corp. (unlisted), and that it had also signed a separate agreement under which LINE Corp. and Mirai Fund Limited Liability Partnership had pledged to underwrite the company’s issuance of new shares through third-party

allotment, which in turn would lead to changes in the company’s principal shareholder and controlling company. With the conclusion of these agreements, the company created a new medium-term management plan spanning the three-year period from FY08/21 to FY08/23 on October 15, 2020. The company forecasts gross merchandise volume of JPY250.0bn (+56.0% YoY), revenue of JPY60.0bn, and an operating loss of JPY2.0bn for FY08/22, and gross merchandise volume of JPY340.0bn (+36.0% YoY), revenue of JPY97.0bn, and operating profit of JPY12.0bn for FY08/23. Under its medium-term plan, the company aims to make food delivery an everyday occurrence. For details, refer to the Medium-term business plan section. ▷ Private placement of shares: The company received full payment for new shares issued to LINE Corporation and Mirai Fund LLP through a private placement on April 24, 2020. As a result, capital stock and capital surplus increased by JPY15.0bn each in Q3 FY08/20. ▷ Change in representative director: Demae-can chairman and representative director Rie Nakamura will resign at the conclusion of the annual general meeting of shareholders scheduled to be held on November 26, 2020 due to the expiration of her term of office. As a result, the company will have only one representative director, Hideo Fujii, CEO. After the general meeting of shareholders, Ms. Nakamura will serve as an executive advisor to the company and will be involved in advising on organizational management as well as activities to expand the delivery industry.

43/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Performance by segment By segment FY08/18 FY08/19 FY 08/ 20 Cumulat ive (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue 1,207 2,569 4,005 5,431 1,434 3,120 4,847 6,666 1,817 3,829 6,823 10,306 YoY -0.3% 1.7% 5.1% 9.8% 18.8% 21.4% 21.0% 22.7% 26.8% 22.7% 40.8% 54.6% Demae-can 859 1,878 2,978 4,078 1,117 2,462 3,867 5,395 1,510 3,216 6,075 9,375 YoY 2.1% 6.0% 10.2% 16.5% 30.0% 31.1% 29.9% 32.3% 35.2% 30.6% 57.1% 73.8% Basic operating fees ------2,736 3,744 - - 3,796 5,725 YoY ------38.7%52.9% Order processing fees ------141 326 - - 1,302 2,324 YoY ------821.7%613.5% Other ------989 1,325 - - 977 1,326 YoY ------1.3%0.1% Mail Order 348 691 1,027 1,353 317 657 980 1,271 307 613 748 931 YoY -5.6% -8.3% -7.3% -6.4% -8.9% -4.8% -4.5% -6.1% -3.1% -6.7% -23.7% -26.7% Adjustments -45 -97 -147 -200 -54 -120 -190 -265 -64 -143 -253 -410 Operating profit 206 341 560 837 103 -40 24 -39 -210 -989 -1,609 -2,623 YoY -2.5%-8.4%-11.2%4.6%-50.1%--95.7%----- Operating profit margin 17.1%13.3%14.0%15.4%7.2%-0.5%----- Demae-can 222 365 591 863 114 -33 31 -18 -183 -936 -1,486 -2,456 YoY -4.5%-9.3%-12.2%1.1%-48.6%--94.8%----- Operating profit margin 25.8% 19.4% 19.9% 21.2% 10.2% -1.3% 0.8% -0.3% -12.1% -29.1% -24.5% -26.2% Mail Order 49 107 164 218 42 106 170 224 45 98 111 155 YoY -27.4% -26.0% -20.3% -15.7% -13.7% -1.6% 4.0% 2.8% 7.8% -6.9% -34.6% -31.0% Operating profit margin 14.0% 15.6% 15.9% 16.1% 13.3% 16.1% 17.4% 17.6% 14.8% 16.1% 14.9% 16.6% Adjustments -64 -132 -195 -244 -53 -113 -177 -246 -73 -151 -234 -322 By segment FY 08/ 18 FY 08/ 19 FY 08/ 20 Quarterly (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Revenue 1,207 1,362 1,436 1,426 1,434 1,686 1,728 1,819 1,817 2,011 2,994 3,484 YoY -0.3% 3.5% 11.8% 25.8% 18.8% 23.8% 20.3% 27.6% 26.8% 19.3% 73.3% 91.5% Demae-can 859 1,019 1,100 1,100 1,117 1,346 1,405 1,528 1,510 1,706 2,859 3,300 YoY 2.1% 9.5% 18.3% 38.1% 30.0% 32.0% 27.7% 38.9% 35.2% 26.7% 103.6% 115.9% Mail Order 348 343 336 326 317 340 323 291 307 306 135 183 YoY -5.6% -10.9% -5.2% -3.1% -8.9% -0.7% -3.9% -10.8% -3.1% -10.2% -58.2% -37.0% Adjustments -45 -52 -51 -53 -54 -66 -70 -76 -64 -78 -110 -158 Operating profit 206 135 219 277 103 -143 64 -63 -210 -779 -620 -1,014 YoY -2.5%-16.2%-15.2%63.4%-50.1%--70.8%----- Operating profit margin 17.1%9.9%15.3%19.4%7.2%-3.7%----- Demae-can 222 144 226 272 114 -147 64 -48 -183 -754 -550 -970 YoY -4.5%-15.8%-16.6%50.7%-48.6%--71.9%----- Operating profit margin 25.8% 14.1% 20.6% 24.7% 10.2% -10.9% 4.5% -3.2% -12.1% -44.2% -19.2% -29.4% Mail Order 49 59 56 55 42 64 64 54 45 53 13 43 YoY -27.4% -24.8% -6.4% 1.8% -13.7% 8.5% 14.7% -1.0% 7.8% -16.6% -80.1% -19.8% Operating profit margin 14.0% 17.1% 16.7% 16.8% 13.3% 18.7% 19.9% 18.6% 14.8% 17.4% 9.5% 23.7% Adjustments -64 -67 -63 -50 -53 -60 -64 -69 -73 -79 -82 -88 Key performance indicators FY08/18 FY08/19 FY08/20 Quarterly Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Number of orders ('000) 5,085 5,938 5,972 6,330 6,284 7,478 7,134 7,552 7,147 8,216 10,687 11,020 YoY 34.1% 34.6% 36.4% 34.8% 23.6% 25.9% 19.5% 19.3% 13.7% 9.9% 49.8% 45.9% QoQ 8.3% 16.8% 0.6% 6.0% -0.7% 19.0% -4.6% 5.9% -5.4% 15.0% 30.1% 3.1% Number of affiliated stores 15,712 16,081 16,439 17,207 17,834 18,572 19,452 19,911 20,720 21,450 24,000 33,000 YoY 10.6% 10.5% 9.9% 12.3% 13.5% 15.5% 18.3% 15.7% 16.2% 15.5% 23.4% 65.7% QoQ 2.6% 2.3% 2.2% 4.7% 3.6% 4.1% 4.7% 2.4% 4.1% 3.5% 11.9% 37.5% Number of active users (mn) 2.45 2.55 2.62 2.69 2.74 2.82 2.90 3.00 3.10 3.20 3.70 3.92 YoY 23.7% 20.0% 17.0% 14.5% 11.8% 10.6% 10.7% 11.5% 13.1% 13.5% 27.6% 30.7% QoQ 4.3% 4.1% 2.7% 2.7% 1.9% 2.9% 2.8% 3.4% 3.3% 3.2% 15.6% 5.9% Number of Sharing Delivery bases 17 23 33 60 78 104 161 215 239 275 336 384 YoY - -1550.0%500.0%358.8%352.2%387.9%258.3%206.4%164.4%108.7%78.6% QoQ 70.0% 35.3% 43.5% 81.8% 30.0% 33.3% 54.8% 33.5% 11.2% 15.1% 22.2% 14.3% Orders / Active users (approx. repeat order ratio) 2.08 2.33 2.28 2.35 2.29 2.65 2.46 2.52 2.31 2.57 2.89 2.81 YoY 8.4% 12.2% 16.6% 17.7% 10.5% 13.9% 7.9% 7.0% 0.5% -3.2% 17.4% 11.7% QoQ 3.9% 12.2% -2.1% 3.2% -2.5% 15.6% -7.2% 2.3% -8.4% 11.4% 12.5% -2.7% Source: Shared Research based on company data Note: Disclosure classifications for consolidated revenue in the Demae-can business changed in cumulative Q3 FY08/20 accompanying changes in its fee structure. The above figures show only figures after the classification change.

Demae-can business In Q4, the mainstay Demae-can business reported revenue of JPY3.3bn (+115.9% YoY) and an operating loss of JPY970mn (versus loss of JPY48mn in Q4 FY08/19).

▷ Disclosure classifications for consolidated revenue in the Demae-can business changed in Q3 FY08/20 accompanying changes in its fee structure. In FY08/20, revenue broke down to Demae-can service fees JPY5.7bn (+52.9% YoY), delivery commissions

44/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

JPY2.3bn (+613.5% YoY), and other JPY1.3bn (+0.1% YoY). Demae-can service fees increased thanks to growth in the number of orders (+30.3% YoY) and the March 2020 fee structure changes. ▷ SG&A expenses for full-year FY08/20 comprised JPY3.9bn for advertising expenses (+JPY2.3bn, or +139.9% YoY), JPY3.9bn for personnel expenses (+JPY2.3bn, or +144.6% YoY), and JPY2.2bn in other expenses (+JPY1.1bn, or +107.5% YoY). Advertising expenses included increased spending on sales promotion and brand awareness, while personnel and other expenses rose as the company set up directly managed Sharing Delivery bases.

In Q4, KPIs for the Demae-can business were as follows: a) Orders: 11.0mn (+45.9% YoY) b) Affiliated restaurants: 33,000 (+65.7% YoY) c) Active users: 3.9mn (+30.7% YoY)

Delivery bases (Sharing Delivery bases) numbered 384, up 48 versus end-May 2020.

▷ The number of affiliated restaurants showed especially strong growth. The company’s strategic approach is as follows: First it grows the number of affiliated restaurants. This results in more orders and active users, and the increasing density boosts

delivery efficiency. Among major chains, the company is accelerating the number of McDonald’s affiliates. As of end-October 2020, 850 McDonald’s restaurants offered the company’s services. ▷ According to the company’s research, running TV commercials and increasing its transport advertising boosted awareness of Demae-can by 12.4pp from July 2020 (before the commercials) to 69.6% in late August. ▷ The company had about 6,000 delivery personnel as of October 2020, 3–4x the headcount before the COVID-19 pandemic (separately, partner delivery bases have about 4,000 delivery personnel). The company said that in April–June 2020, Sharing

Delivery volume handled was 4x year-earlier levels. ▷ Based on full-year gross merchandising volume and order numbers disclosed by the company, the average order was about JPY2,800. ▷ The Japanese government’s Go to Eat campaign, which supports restaurants and agricultural and fishery businesses, only covers deliveries and takeout services provided by registered restaurants themselves, which excludes the company’s services. While Demae-can’s services are at a disadvantage to those covered by the scheme, the company said that there has been no

notable impact on order growth following the launch of the campaign. Demae-can thinks that its services and those covered by the Go to Eat campaign are not in direct conflict.

45/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Demae-can business KPIs

Key performance indicators (KPIs) No . o f o rd ers ('000) Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 655 673 700 818 775 660 792 729 733 732 773 828 2,028 2,252 2,254 2,333 8,868 FY08/15 723 763 837 960 954 825 908 858 876 872 966 1,017 2,323 2,739 2,642 2,855 10,559 FY08/16 929 962 1,034 1,194 1,178 1,129 1,162 1,134 1,165 1,097 1,241 1,306 2,924 3,502 3,460 3,643 13,529 FY08/17 1,215 1,280 1,298 1,521 1,513 1,377 1,507 1,444 1,427 1,384 1,636 1,676 3,792 4,411 4,378 4,696 17,278 FY08/18 1,565 1,787 1,733 1,997 2,032 1,909 2,056 1,899 2,017 1,996 2,153 2,180 5,085 5,938 5,972 6,330 23,325 FY08/19 2,110 2,049 2,125 2,621 2,535 2,322 2,515 2,290 2,329 2,429 2,449 2,674 6,284 7,478 7,134 7,552 28,448 FY08/20 2,352 2,324 2,471 2,776 2,710 2,730 3,030-----7,147 8,216 10,687 11,020 37,070 FY08/14 YoY change 56 101 97 79 97 56 90 88 111 92 111 119 254 232 290 322 1,098 FY08/15 YoY change 68 90 138 142 179 166 116 129 143 140 193 189 295 487 388 522 1,691 FY08/16 YoY change 206 199 196 235 224 304 254 276 289 225 275 288 601 763 818 788 2,970 FY08/17 YoY change 286 318 264 327 335 248 346 310 263 287 395 371 869 909 918 1,053 3,749 FY08/18 YoY change 350 508 435 476 519 532 549 455 590 612 517 504 1,293 1,527 1,594 1,633 6,047 FY08/19 YoY change 545 262 393 624 502 414 459 - 312 432 296 494 1,199 1,540 1,162 1,222 5,123 FY08/20 YoY change 242 275 346 155 175 408 515 - - - - - 863 738 3,553 3,468 8,622 FY08/14 YoY 9.3% 17.7% 16.1% 10.6% 14.3% 9.2% 12.7% 13.8% 17.9% 14.3% 16.7% 16.8% 14.3% 11.5% 14.8% 16.0% 14.1% FY08/15 YoY 10.3% 13.4% 19.7% 17.4% 23.1% 25.1% 14.7% 17.7% 19.4% 19.2% 25.0% 22.8% 14.6% 21.6% 17.2% 22.4% 19.1% FY08/16 YoY 28.5% 26.1% 23.4% 24.5% 23.5% 36.8% 27.9% 32.2% 32.9% 25.8% 28.5% 28.3% 25.9% 27.8% 31.0% 27.6% 28.1% FY08/17 YoY 30.8% 33.1% 25.5% 27.3% 28.4% 21.9% 29.8% 27.3% 22.6% 26.2% 31.8% 28.4% 29.7% 26.0% 26.5% 28.9% 27.7% FY08/18 YoY 28.8% 39.7% 33.5% 31.3% 34.3% 38.6% 36.4% 31.5% 41.3% 44.2% 31.6% 30.0% 34.1% 34.6% 36.4% 34.8% 35.0% FY08/19 YoY 34.8% 14.6% 22.7% 31.2% 24.7% 21.7% 22.3% 20.6% 15.5% 21.7% 13.7% 22.7% 23.6% 25.9% 19.5% 19.3% 22.0% FY08/20 YoY 11.5% 13.4% 16.3% 5.9% 7.0% 18.0% 21.0% - - - - - 13.7% 9.9% 49.8% 45.9% 30.3% No. of affiliat ed st ores Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 11,323 11,383 11,510 11,545 11,563 11,644 11,350 11,414 11,482 11,493 11,551 11,636 11,510 11,644 11,482 11,636 11,636 FY08/15 11,600 11,628 11,680 11,737 11,752 11,812 11,854 11,947 12,011 12,084 12,167 12,213 11,680 11,812 12,011 12,213 12,213 FY08/16 12,256 12,412 12,505 12,588 12,548 12,529 12,700 12,936 13,018 13,226 13,418 13,656 12,505 12,529 13,018 13,656 13,656 FY08/17 13,920 14,033 14,206 14,366 14,456 14,559 14,669 14,839 14,953 15,099 15,208 15,318 14,206 14,559 14,953 15,318 15,318 FY08/18 15,411 15,533 15,712 15,867 16,000 16,081 16,175 16,318 16,439 16,685 16,874 17,207 15,712 16,081 16,439 17,207 17,207 FY08/19 17,372 17,577 17,834 18,081 18,343 18,572 18,760 19,122 19,452 19,395 19,680 19,911 17,834 18,572 19,452 19,911 19,911 FY08/20 20,099 20,327 20,720 20,941 21,269 21,450 21,609 - 24,000 - - - 20,720 21,450 24,000 33,000 33,000 FY08/14 YoY change 95 145 289 311 487 576 276 347 405 393 419 300 289 576 405 300 300 FY08/15 YoY change 277 245 170 192 189 168 504 533 529 591 616 577 170 168 529 577 577 FY08/16 YoY change 656 784 825 851 796 717 846 989 1,007 1,142 1,251 1,443 825 717 1,007 1,443 1,443 FY08/17 YoY change1,664 1,621 1,701 1,778 1,908 2,030 1,969 1,903 1,935 1,873 1,790 1,662 1,701 2,030 1,935 1,662 1,662 FY08/18 YoY change1,491 1,500 1,506 1,501 1,544 1,522 1,506 1,479 1,486 1,586 1,666 1,889 1,506 1,522 1,486 1,889 1,889 FY08/19 YoY change1,961 2,044 2,122 2,214 2,343 2,491 2,585 2,804 3,013 2,710 2,806 2,704 2,122 2,491 3,013 2,704 2,704 FY08/20 YoY change2,727 2,750 2,886 2,860 2,926 2,878 2,849 - 4,548 - - - 2,886 2,878 4,548 13,089 13,089 FY08/14 YoY 0.8% 1.3% 2.6% 2.8% 4.4% 5.2% 2.5% 3.1% 3.7% 3.5% 3.8% 2.6% 2.6% 5.2% 3.7% 2.6% 2.6% FY08/15 YoY 2.4% 2.2% 1.5% 1.7% 1.6% 1.4% 4.4% 4.7% 4.6% 5.1% 5.3% 5.0% 1.5% 1.4% 4.6% 5.0% 5.0% FY08/16 YoY 5.7% 6.7% 7.1% 7.3% 6.8% 6.1% 7.1% 8.3% 8.4% 9.5% 10.3% 11.8% 7.1% 6.1% 8.4% 11.8% 11.8% FY08/17 YoY 13.6% 13.1% 13.6% 14.1% 15.2% 16.2% 15.5% 14.7% 14.9% 14.2% 13.3% 12.2% 13.6% 16.2% 14.9% 12.2% 12.2% FY08/18 YoY 10.7% 10.7% 10.6% 10.4% 10.7% 10.5% 10.3% 10.0% 9.9% 10.5% 11.0% 12.3% 10.6% 10.5% 9.9% 12.3% 12.3% FY08/19 YoY 12.7% 13.2% 13.5% 14.0% 14.6% 15.5% 16.0% 17.2% 18.3% 16.2% 16.6% 15.7% 13.5% 15.5% 18.3% 15.7% 15.7% FY08/20 YoY 15.7% 15.6% 16.2% 15.8% 16.0% 15.5% 15.2% - 23.4% - - - 16.2% 15.5% 23.4% 65.7% 65.7% No. of active users (mn) Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 1.35 - - - 1.35 1.35 FY08/15 1.54 - - - 1.54 1.54 FY08/16 1.74 1.78 1.82 1.84 1.88 1.92 - - 1.82 1.92 1.92 FY08/17 1.95 1.98 1.98 2.03 2.08 2.13 2.17 2.21 2.24 2.29 2.33 2.35 1.98 2.13 2.24 2.35 2.35 FY08/18 2.38 2.43 2.45 2.48 2.52 2.55 2.58 2.59 2.62 2.65 2.66 2.69 2.45 2.55 2.62 2.69 2.69 FY08/19 2.71 2.72 2.74 2.78 2.81 2.82 2.84 2.88 2.90 2.94 2.95 3.00 2.74 2.82 2.90 3.00 3.00 FY08/20 3.02 3.05 3.10 3.14 3.17 3.20 3.25 - 3.70 - - - 3.10 3.20 3.70 3.92 3.92 FY08/14 YoY ------16.4% - - - 16.4% 16.4% FY08/15 YoY ------14.1% - - - 14.1% 14.1% FY08/16 YoY ------24.7% - - - 24.7% 24.7% FY08/17 YoY ------24.7% 24.2% 23.2% 24.3% 24.2% 22.4% - - 23.2% 22.4% 22.4% FY08/18 YoY 22.2% 22.7% 23.7% 22.3% 21.3% 20.0% 18.9% 17.2% 17.0% 15.7% 14.2% 14.5% 23.7% 20.0% 17.0% 14.5% 14.5% FY08/19 YoY 13.9% 11.9% 11.8% 12.1% 11.5% 10.6% 10.1% 11.2% 10.7% 10.9% 10.9% 11.5% 11.8% 10.6% 10.7% 11.5% 11.5% FY08/20 YoY 11.4% 12.1% 13.1% 12.9% 12.8% 13.5% 14.4% - 27.6% - - - 13.1% 13.5% 27.6% 30.7% 30.7% No. of Sharing Delivery bases Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Q1 Q2 Q3 Q4 FY FY08/17 12 10 21010 FY08/18 - - 17 - - 23 27 - 33 39 44 60 17 23 33 60 60 FY08/19 63 67 78 83 92 104 124 147 161 172 198 215 78 104 161 215 215 FY08/20 221 228 239 247 259 275 293 - 336 - - - 239 275 336 384 384 FY08/17 MoM change --+8 FY08/18 MoM change ------+4 - - +6 +5 +16 +7 +6 +10 +27 +50 FY08/19 MoM change +3 +4 +11 +5 +9 +12 +20 +23 +14 +11 +26 +17 +18 +26 +57 +54 +155 FY08/20 MoM change +6 +7 +11 +8 +12 +16 +18 - +43 - - +24 +36 +61 +48 +169 Notes: The company started disclosing data on active users in March 2017. Active user data through February 2017 reflect Shared Research estimates with exception of August data. Order figures include orders at partner companies such as NTT Docomo and LINE. Order figures are rounded down to the nearest million yen from January 2020. Monthly orders are not shown from April 2020 as the company discontinued monthly disclosures, ending with the March 2020 report.

Number of orders divided by number of active users (approximate repeat order rate) Orders / Active users Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/16 ------0.67 0.64 0.64 0.60 0.67 0.69 - - 1.90 1.90 7.05 FY08/17 0.63 0.65 0.66 0.76 0.74 0.66 0.70 0.66 0.64 0.61 0.71 0.72 1.91 2.08 1.95 2.00 7.35 FY08/18 0.66 0.74 0.71 0.81 0.81 0.75 0.80 0.73 0.77 0.76 0.81 0.81 2.08 2.33 2.28 2.35 8.67 FY08/19 0.78 0.75 0.78 0.95 0.91 0.83 0.89 0.80 0.81 0.83 0.83 0.90 2.29 2.65 2.46 2.52 9.48 FY08/20 0.78 0.77 0.80 0.89 0.86 0.86 0.94 - - - - - 2.31 2.57 2.89 2.81 9.46 FY08/17 YoY ------5.1% 3.4% 0.2% 2.0% 6.1% 4.2% - - 2.7% 5.3% 4.3% FY08/18 YoY 5.3% 14.1% 8.4% 6.8% 10.3% 14.9% 14.2% 11.4% 20.7% 24.0% 14.5% 13.8% 8.4% 12.2% 16.6% 17.7% 17.9% FY08/19 YoY 18.1% 1.5% 9.6% 17.2% 11.6% 9.6% 10.9% 9.0% 4.1% 9.8% 2.5% 10.3% 10.5% 13.9% 7.9% 7.0% 9.4% FY08/20 YoY -0.01% 1.5% 3.2% -6.3% -5.3% 3.9% 5.7% - - - - - 0.5% -3.2% 17.4% 11.7% -0.3% Source: Shared Research based on company data

Discontinuation of monthly reporting (March 2020) The company had been disclosing key performance indicators for its Demae-can business on a monthly basis, but has decided to discontinue these monthly disclosures going forward, ending with the March 2020 report. The company believes that making quarterly disclosures accompanied by fuller explanations will be more useful to investors at this point, as it is currently in the process of making long-term investments aimed at creating a “life infrastructure essential to the future of Japan” rather than a simple food delivery service. By enhancing the content of its disclosures, including

46/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

consolidated results, medium-term growth strategies, and non-financial information, the company is looking to further enhance the quality of information it provides and work proactively to promote a better understanding of its enterprise value.

Mail Order business In Q4, the Mail order business reported revenue of JPY183mn (-37.0% YoY) and operating profit of JPY43mn (-19.8% YoY).

In the Mail Order business, demand has fallen substantially as its key customers, including izakaya (bars) have been impacted severely by customers staying at home. However, the company has been able to reassign personnel within the group, shifting them from the Mail Order business to the growing Demae-can business.

Grubhub inc. FY12/18 FY12/19 FY12/20 (USDmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 Revenue 233 240 247 288 324 325 322 341 363 459 YoY 49.0% 51.0% 51.6% 40.3% 39.2% 35.6% 30.3% 18.6% 12.1% 41.3% Total costs 201 205 225 290 315 319 318 366 409 510 YoY 53.3% 50.3% 54.8% 62.3% 56.7% 55.3% 41.3% 26.0% 29.8% 59.9% % of revenue 86.4% 85.7% 91.2% 101.0% 97.3% 98.1% 98.9% 107.3% 112.6% 111.0% Pre-tax profit 31 34 22 -5 6 1 -2 -31 -52 -57 YoY 22.2% 55.3% 23.5% - -80.3% -98.1% - - - - Pre-tax profit margin 13.1% 14.3% 8.7% -1.7% 1.9% 0.2% -0.8% -9.1% -14.4% -12.5% Income taxes -0 4 -1 0 -1 -1 -3 -3 -19 -12 Implied tax rate -0.8% 12.2% -5.7% -4.7% -14.3% -92.6% 141.4% 10.6% 36.1% 20.9% Net income attributable to owners of parent 31 30 23 -5 7 1 1 -28 -33 -45 Active Diners (mn) 15.08 15.58 16.38 17.69 19.29 20.29 21.20 22.62 23.89 27.48 YoY 72.3% 69.8% 67.0% 22.3% 27.9% 30.2% 29.4% 27.9% 23.9% 35.4% No. of orders / Average no. of users 2.7 2.5 2.4 2.5 2.5 2.2 2.0 2.1 2.0 2.3 YoY -22.9% -21.2% -18.9% -15.2% -4.7% -10.5% -15.3% -16.4% -20.4% 2.0% Daily Average Grubs ('000) 437 423 416 468 521 489 457 503 516 647 DAG x No. of days (mn) 39.32 38.51 38.27 43.01 46.89 44.49 42.07 46.24 46.98 58.89 YoY 34.6% 34.8% 36.6% 19.1% 19.2% 15.5% 9.9% 7.5% 0.2% 32.4% Gross food sales 1,245 1,220 1,215 1,377 1,502 1,459 1,400 1,552 1,630 2,325 YoY 38.6% 38.7% 40.0% 20.9% 20.7% 19.6% 15.3% 12.7% 8.5% 59.4% Source: Shared Research based on publicly disclosed data

Because Uber was listed in 2019 (NYSE: UBER), Uber Eats figures (on a global basis) are shown for reference.

Uber Eats (Worldwide) FY12/18 FY12/19 FY12/20 (USDmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 Revenue 283 346 394 437 536 595 645 734 819 1,211 YoY 241.0% 186.0% 141.7% 98.6% 89.4% 72.0% 63.7% 68.0% 52.8% 103.5% Excess driver incentives 97 124 200 266 291 253 247 315 292 326 YoY 106.4% 195.2% 284.6% 285.5% 200.0% 104.0% 23.5% 18.4% 0.3% 28.9% % of revenue 34.3% 35.8% 50.8% 60.9% 54.3% 42.5% 38.3% 42.9% 35.7% 26.9% Driver referrals 32366564 2- YoY - -50.0% -25.0% -86.0% 100.0% 150.0% 100.0% -33.3% -66.7% - % of revenue 3.1% 1.6% 1.5% 2.3% 2.1% 2.0% 2.4% 1.3% 0.7% - Adjusted net revenue 183 220 191 165 239 337 392 415 527 885 YoY 454.5% 193.3% 78.5% 11.5% 30.6% 53.2% 105.2% 151.5% 120.5% 162.6% % of revenue 64.7% 63.6% 48.5% 37.8% 44.6% 56.6% 60.8% 56.5% 64.3% 73.1% Source: Shared Research based on publicly disclosed data

47/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Q3 FY08/20 results Overview

▷ For the three months of Q3 FY08/20, the company reported consolidated revenue of JPY3.0bn (+73.3% YoY), an operating loss of JPY620mn (versus operating profit of JPY64mn in Q3 FY08/19), a recurring loss of JPY951mn (versus recurring profit of JPY74mn in Q3 FY08/19), and a net loss attributable to owners of the parent of JPY973mn (versus net income of JPY27mn in Q3 FY08/19). Operating losses were the result of the company’s aggressive investment activity and development of the Demae- can business, comprising advertising spend and higher expenses for delivery personnel in the growing Sharing Delivery business. Demae-can also booked JPY326mn in share issuance costs as non-operating expenses. ▷ Demae-can business: Demand for food deliveries expanded sharply from April 2020, largely as a result of the Japanese government’s declaration of a state of emergency and calls for the population throughout the country to refrain from making unnecessary trips outside the home amid the COVID-19 pandemic. The number of orders in Q1 (September–November 2019) was up13.7% YoY, while for Q2 (December 2019–February 2020) YoY growth was 9.9%. However, for Q3 (March–May 2020) growth was 49.8% YoY. Turning to leading KPIs in the Demae-can business in Q3, the number of orders reached 10.7mn (+49.8% YoY), with affiliated restaurants at 24,000 (+23.4% YoY), and active users at 3.7mn (+27.6% YoY). There were 336 delivery bases (Sharing Delivery bases), up 61 versus end-February 2020. ▷ Mail Order business: Demand dropped sharply, affected significantly by consumers refraining from making unnecessary trips outside the home. ▷ As of June 25, 2020, Demae-can had still not released FY08/20 earnings forecast, and the company noted that it would do so as soon as reasonable estimates could be made. Despite the gradual easing of restrictions tied to the Japanese government’s state of emergency declaration from mid-May, the food and beverage industry remains focused on how best to operate in the “with corona” era, making it extremely difficult for the company to estimate the impact of industry trends on its earnings. ▷ The company received full payment for new shares issued to LINE Corporation and Mirai Fund LLP through a private placement on April 24, 2020. As a result, capital stock and legal capital surplus increased by JPY15.0bn each in Q3 FY08/20. From May 2020 through August 2023, the company plans to allocate JPY5.9bn of the funds raised to capex in system upgrades

and development, JPY16.1bn to operating funds (including marketing and hiring more delivery personnel) and JPY7.7bn for expansion of delivery staff. See Medium-term business plan section for details.

48/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Performance by segment By segment FY08/18 FY08/19 FY 08/ 20 Cumulative (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Revenue 1,207 2,569 4,005 5,431 1,434 3,120 4,847 6,666 1,817 3,829 6,823 YoY -0.3% 1.7% 5.1% 9.8% 18.8% 21.4% 21.0% 22.7% 26.8% 22.7% 40.8% Demae-can 859 1,878 2,978 4,078 1,117 2,462 3,867 5,395 1,510 3,216 6,075 YoY 2.1% 6.0% 10.2% 16.5% 30.0% 31.1% 29.9% 32.3% 35.2% 30.6% 57.1% Basic operating fees ------2,736 - - - 3,796 YoY ------38.7% Order processing fees ------141 - - - 1,302 YoY ------821.7% Other ------989 - - - 977 YoY ------1.3% Mail Order 348 691 1,027 1,353 317 657 980 1,271 307 613 748 YoY -5.6% -8.3% -7.3% -6.4% -8.9% -4.8% -4.5% -6.1% -3.1% -6.7% -23.7% Adjustments -45 -97 -147 -200 -54 -120 -190 -265 -64 -143 -253 Operating profit 206 341 560 837 103 -40 24 -39 -210 -989 -1,609 YoY -2.5% -8.4% -11.2% 4.6% -50.1% - -95.7% - - - - Operating profit margin 17.1% 13.3% 14.0% 15.4% 7.2% - 0.5% - - - - Demae-can 222 365 591 863 114 -33 31 -18 -183 -936 -1,486 YoY -4.5% -9.3% -12.2% 1.1% -48.6% - -94.8% - - - - Operating profit margin 25.8% 19.4% 19.9% 21.2% 10.2% -1.3% 0.8% -0.3% -12.1%-29.1%-24.5% Mail Order 49 107 164 218 42 106 170 224 45 98 111 YoY -27.4% -26.0% -20.3% -15.7% -13.7% -1.6% 4.0% 2.8% 7.8% -6.9% -34.6% Operating profit margin 14.0% 15.6% 15.9% 16.1% 13.3% 16.1% 17.4% 17.6% 14.8% 16.1% 14.9% Adjustments -64 -132 -195 -244 -53 -113 -177 -246 -73 -151 -234 By segment FY 08/ 18 FY08/19 FY 08/ 20 Quarterly (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 Revenue 1,207 1,362 1,436 1,426 1,434 1,686 1,728 1,819 1,817 2,011 2,994 YoY -0.3% 3.5% 11.8% 25.8% 18.8% 23.8% 20.3% 27.6% 26.8% 19.3% 73.3% Demae-can 859 1,019 1,100 1,100 1,117 1,346 1,405 1,528 1,510 1,706 2,859 YoY 2.1% 9.5% 18.3% 38.1% 30.0% 32.0% 27.7% 38.9% 35.2% 26.7% 103.6% Mail Order 348 343 336 326 317 340 323 291 307 306 135 YoY -5.6% -10.9% -5.2% -3.1% -8.9% -0.7% -3.9% -10.8% -3.1% -10.2% -58.2% Adjustments -45 -52 -51 -53 -54 -66 -70 -76 -64 -78 -110 Operating profit 206 135 219 277 103 -143 64 -63 -210 -779 -620 YoY -2.5% -16.2% -15.2% 63.4% -50.1% - -70.8% - - - - Operating profit margin 17.1% 9.9% 15.3% 19.4% 7.2% - 3.7% - - - - Demae-can 222 144 226 272 114 -147 64 -48 -183 -754 -550 YoY -4.5% -15.8% -16.6% 50.7% -48.6% - -71.9% - - - - Operating profit margin 25.8% 14.1% 20.6% 24.7% 10.2% -10.9% 4.5% -3.2% -12.1% -44.2% -19.2% Mail Order 49 59 56 55 42 64 64 54 45 53 13 YoY -27.4% -24.8% -6.4% 1.8% -13.7% 8.5% 14.7% -1.0% 7.8% -16.6% -80.1% Operating profit margin 14.0% 17.1% 16.7% 16.8% 13.3% 18.7% 19.9% 18.6% 14.8% 17.4% 9.5% Adjustments -64 -67 -63 -50 -53 -60 -64 -69 -73 -79 -82 Source: Shared Research based on company data Note: Disclosure classifications for consolidated revenue in the Demae-can business changed in cumulative Q3 FY08/20 accompanying changes in its fee structure. The above figures show only figures after the classification change.

Demae-can business In Q3, the mainstay Demae-can business reported revenue of JPY2.9bn (+103.6% YoY) and an operating loss of JPY550mn (versus operating profit of JPY64mn in Q3 FY08/19).

▷ Disclosure classifications for consolidated revenue in the Demae-can business changed in cumulative Q3 FY08/20 accompanying changes in its fee structure. For cumulative Q3 FY08/20, revenue broke down to Demae-can service fees JPY3.8bn (+38.7% YoY), delivery commissions JPY1.3bn (+821.7% YoY), and other JPY977mn (-1.3% YoY). ▷ As of April 2020, pay-for-use charges for affiliated restaurants (that use the Sharing Delivery service) were as shown below, in principle. Pay-for-use charges differ according to order size. The base (fixed) charge is an initial set-up fee of JPY20,000, with no charge for monthly operating expenses. The company is focused on market growth (in other words, growth in the number of active users and orders) and would like to reduce fees in the long term. A. Demae-can service fees: 10% of order cost (before tax, including points cost)

B. Delivery commissions: 30% of order cost (before tax; 23% from May 1–October 31, 2020)

49/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

C. Payment processing fees: Maximum of 3% of order value (before tax; for cashless payments, fees paid to credit card company)

In Q3, KPIs for the Demae-can business were as follows:

▷ Orders: 10.7mn (+49.8% YoY) ▷ Affiliated restaurants: 24,000 (+23.4% YoY) ▷ Active users: 3.7mn (+27.6% YoY) ▷ Delivery bases (Sharing Delivery bases) numbered 336, up 61 versus end-February 2020.

Demand for food deliveries expanded sharply from April 2020, largely as a result of the Japanese government’s declaration of a state of emergency and calls for the population throughout the country to refrain from making unnecessary trips outside the home amid the COVID-19 pandemic. The number of orders in Q1 (September–November 2019) was up 13.7% YoY, while for Q2 (December 2019–February 2020) growth was 9.9% YoY. For Q3 (March–May 2020), on the other hand, the number of orders was up 49.8% YoY. Growth in order numbers significantly outpaced that of active users (+27.6% YoY) in Q3. This shows that while the user base is growing, repeat orders from existing customers are also growing. The company said it thought that some consumers decided to try meal delivery as they self-isolated during the state of emergency.

▷ The company said that weekday use increased versus the pre-COVID-19 pandemic situation. There was growth in both usage by families and single customers, resulting in just a slight increase in revenue per order. ▷ The Japanese government started lifting the state of emergency declaration on May 14 in some regions and in all jurisdictions by May 25. As of July 14, there was no region under a state of emergency. The government also progressively relaxed

directives for self-restraint such as opening hours for restaurants. ▷ In Q3, feature segments on TV and local government campaigns to encourage use of food delivery services amid the emergency declaration had a positive impact in Q3. ▷ Food deliveries by taxi were permitted for a limited time during the state of emergency, but transportation conditions in Japan’s urban areas and costs to taxi company posed challenges, so the impact on the industry’s delivery structure appears to have been minimal. ▷ From May 19, 2020, it became possible to use PayPay cashless payments. From June 1 through July 7 (falls under Q4), Demae- can customers who used PayPay were entitled to higher-than-usual points conversion ratio.

Moreover, amid a sharp increase in interest from restaurants that have been greatly impacted by consumers staying at home, the company saw a significant expansion in new affiliated restaurants, largely restaurant chains and small and medium-sized restaurants that do not provide delivery services on their own. In March and April 2020, the number of restaurants that wanted to start food delivery was three or four times the normal monthly amount. Therefore, in Q3, the company strengthened its systems to be able to handle the increased demand. The company is also tapping into the resources of Satsuma Ebisudo (mail order company), whose orders have declined due to people staying at home. Following the alliance with LINE announced in March 2020, the company is taking a more proactive approach, and has expanded the areas it covers with its services and increased the number of affiliated restaurants.

50/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Demae-can business KPIs

Key performance indicators (KPIs) No . o f o rd ers ('000) Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 655 673 700 818 775 660 792 729 733 732 773 828 2,028 2,252 2,254 2,333 8,868 FY08/15 723 763 837 960 954 825 908 858 876 872 966 1,017 2,323 2,739 2,642 2,855 10,559 FY08/16 929 962 1,034 1,194 1,178 1,129 1,162 1,134 1,165 1,097 1,241 1,306 2,924 3,502 3,460 3,643 13,529 FY08/17 1,215 1,280 1,298 1,521 1,513 1,377 1,507 1,444 1,427 1,384 1,636 1,676 3,792 4,411 4,378 4,696 17,278 FY08/18 1,565 1,787 1,733 1,997 2,032 1,909 2,056 1,899 2,017 1,996 2,153 2,180 5,085 5,938 5,972 6,330 23,325 FY08/19 2,110 2,049 2,125 2,621 2,535 2,322 2,515 2,290 2,329 2,429 2,449 2,674 6,284 7,478 7,134 7,552 28,448 FY08/20 2,352 2,324 2,471 2,776 2,710 2,730 3,030-----7,147 8,216 10,687 - - FY08/14 YoY change 56 101 97 79 97 56 90 88 111 92 111 119 254 232 290 322 1,098 FY08/15 YoY change 68 90 138 142 179 166 116 129 143 140 193 189 295 487 388 522 1,691 FY08/16 YoY change 206 199 196 235 224 304 254 276 289 225 275 288 601 763 818 788 2,970 FY08/17 YoY change 286 318 264 327 335 248 346 310 263 287 395 371 869 909 918 1,053 3,749 FY08/18 YoY change 350 508 435 476 519 532 549 455 590 612 517 504 1,293 1,527 1,594 1,633 6,047 FY08/19 YoY change 545 262 393 624 502 414 459 - 312 432 296 494 1,199 1,540 1,162 1,222 5,123 FY08/20 YoY change 242 275 346 155 175 408 515 - - - - - 863 738 3,553 - - FY08/14 YoY 9.3% 17.7% 16.1% 10.6% 14.3% 9.2% 12.7% 13.8% 17.9% 14.3% 16.7% 16.8% 14.3% 11.5% 14.8% 16.0% 14.1% FY08/15 YoY 10.3% 13.4% 19.7% 17.4% 23.1% 25.1% 14.7% 17.7% 19.4% 19.2% 25.0% 22.8% 14.6% 21.6% 17.2% 22.4% 19.1% FY08/16 YoY 28.5% 26.1% 23.4% 24.5% 23.5% 36.8% 27.9% 32.2% 32.9% 25.8% 28.5% 28.3% 25.9% 27.8% 31.0% 27.6% 28.1% FY08/17 YoY 30.8% 33.1% 25.5% 27.3% 28.4% 21.9% 29.8% 27.3% 22.6% 26.2% 31.8% 28.4% 29.7% 26.0% 26.5% 28.9% 27.7% FY08/18 YoY 28.8% 39.7% 33.5% 31.3% 34.3% 38.6% 36.4% 31.5% 41.3% 44.2% 31.6% 30.0% 34.1% 34.6% 36.4% 34.8% 35.0% FY08/19 YoY 34.8% 14.6% 22.7% 31.2% 24.7% 21.7% 22.3% 20.6% 15.5% 21.7% 13.7% 22.7% 23.6% 25.9% 19.5% 19.3% 22.0% FY08/20 YoY 11.5% 13.4% 16.3% 5.9% 7.0% 18.0% 21.0% - - - - - 13.7% 9.9% 49.8% - - No. of affiliat ed st ores Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 11,323 11,383 11,510 11,545 11,563 11,644 11,350 11,414 11,482 11,493 11,551 11,636 11,510 11,644 11,482 11,636 11,636 FY08/15 11,600 11,628 11,680 11,737 11,752 11,812 11,854 11,947 12,011 12,084 12,167 12,213 11,680 11,812 12,011 12,213 12,213 FY08/16 12,256 12,412 12,505 12,588 12,548 12,529 12,700 12,936 13,018 13,226 13,418 13,656 12,505 12,529 13,018 13,656 13,656 FY08/17 13,920 14,033 14,206 14,366 14,456 14,559 14,669 14,839 14,953 15,099 15,208 15,318 14,206 14,559 14,953 15,318 15,318 FY08/18 15,411 15,533 15,712 15,867 16,000 16,081 16,175 16,318 16,439 16,685 16,874 17,207 15,712 16,081 16,439 17,207 17,207 FY08/19 17,372 17,577 17,834 18,081 18,343 18,572 18,760 19,122 19,452 19,395 19,680 19,911 17,834 18,572 19,452 19,911 19,911 FY08/20 20,099 20,327 20,720 20,941 21,269 21,450 21,609 - 24,000 - - - 20,720 21,450 24,000 - - FY08/14 YoY change 95 145 289 311 487 576 276 347 405 393 419 300 289 576 405 300 300 FY08/15 YoY change 277 245 170 192 189 168 504 533 529 591 616 577 170 168 529 577 577 FY08/16 YoY change 656 784 825 851 796 717 846 989 1,007 1,142 1,251 1,443 825 717 1,007 1,443 1,443 FY08/17 YoY change1,664 1,621 1,701 1,778 1,908 2,030 1,969 1,903 1,935 1,873 1,790 1,662 1,701 2,030 1,935 1,662 1,662 FY08/18 YoY change1,491 1,500 1,506 1,501 1,544 1,522 1,506 1,479 1,486 1,586 1,666 1,889 1,506 1,522 1,486 1,889 1,889 FY08/19 YoY change1,961 2,044 2,122 2,214 2,343 2,491 2,585 2,804 3,013 2,710 2,806 2,704 2,122 2,491 3,013 2,704 2,704 FY08/20 YoY change2,727 2,750 2,886 2,860 2,926 2,878 2,849 - 4,548 - - - 2,886 2,878 4,548 - - FY08/14 YoY 0.8% 1.3% 2.6% 2.8% 4.4% 5.2% 2.5% 3.1% 3.7% 3.5% 3.8% 2.6% 2.6% 5.2% 3.7% 2.6% 2.6% FY08/15 YoY 2.4% 2.2% 1.5% 1.7% 1.6% 1.4% 4.4% 4.7% 4.6% 5.1% 5.3% 5.0% 1.5% 1.4% 4.6% 5.0% 5.0% FY08/16 YoY 5.7% 6.7% 7.1% 7.3% 6.8% 6.1% 7.1% 8.3% 8.4% 9.5% 10.3% 11.8% 7.1% 6.1% 8.4% 11.8% 11.8% FY08/17 YoY 13.6% 13.1% 13.6% 14.1% 15.2% 16.2% 15.5% 14.7% 14.9% 14.2% 13.3% 12.2% 13.6% 16.2% 14.9% 12.2% 12.2% FY08/18 YoY 10.7% 10.7% 10.6% 10.4% 10.7% 10.5% 10.3% 10.0% 9.9% 10.5% 11.0% 12.3% 10.6% 10.5% 9.9% 12.3% 12.3% FY08/19 YoY 12.7% 13.2% 13.5% 14.0% 14.6% 15.5% 16.0% 17.2% 18.3% 16.2% 16.6% 15.7% 13.5% 15.5% 18.3% 15.7% 15.7% FY08/20 YoY 15.7% 15.6% 16.2% 15.8% 16.0% 15.5% 15.2% - 23.4% - - - 16.2% 15.5% 23.4% - - No. of active users (mn) Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/14 1.35 - - - 1.35 1.35 FY08/15 1.54 - - - 1.54 1.54 FY08/16 1.74 1.78 1.82 1.84 1.88 1.92 - - 1.82 1.92 1.92 FY08/17 1.95 1.98 1.98 2.03 2.08 2.13 2.17 2.21 2.24 2.29 2.33 2.35 1.98 2.13 2.24 2.35 2.35 FY08/18 2.38 2.43 2.45 2.48 2.52 2.55 2.58 2.59 2.62 2.65 2.66 2.69 2.45 2.55 2.62 2.69 2.69 FY08/19 2.71 2.72 2.74 2.78 2.81 2.82 2.84 2.88 2.90 2.94 2.95 3.00 2.74 2.82 2.90 3.00 3.00 FY08/20 3.02 3.05 3.10 3.14 3.17 3.20 3.25 - 3.70 - - - 3.10 3.20 3.70 - - FY08/14 YoY ------16.4% - - - 16.4% 16.4% FY08/15 YoY ------14.1% - - - 14.1% 14.1% FY08/16 YoY ------24.7% - - - 24.7% 24.7% FY08/17 YoY ------24.7% 24.2% 23.2% 24.3% 24.2% 22.4% - - 23.2% 22.4% 22.4% FY08/18 YoY 22.2% 22.7% 23.7% 22.3% 21.3% 20.0% 18.9% 17.2% 17.0% 15.7% 14.2% 14.5% 23.7% 20.0% 17.0% 14.5% 14.5% FY08/19 YoY 13.9% 11.9% 11.8% 12.1% 11.5% 10.6% 10.1% 11.2% 10.7% 10.9% 10.9% 11.5% 11.8% 10.6% 10.7% 11.5% 11.5% FY08/20 YoY 11.4% 12.1% 13.1% 12.9% 12.8% 13.5% 14.4% - 27.6% - - - 13.1% 13.5% 27.6% - - No. of Sharing Delivery bases Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Q1 Q2 Q3 Q4 FY FY08/17 12 10 21010 FY08/18 - - 17 - - 23 27 - 33 39 44 60 17 23 33 60 60 FY08/19 63 67 78 83 92 104 124 147 161 172 198 215 78 104 161 215 215 FY08/20 221 228 239 247 259 275 293 - 336 - - - 239 275 336 - - FY08/17 Sequential change --+8 FY08/18 Sequential change ------+4 - - +6 +5 +16 +7 +6 +10 +27 +50 FY08/19 Sequential change +3 +4 +11 +5 +9 +12 +20 +23 +14 +11 +26 +17 +18 +26 +57 +54 +155 FY08/20 Sequential change +6 +7 +11 +8 +12 +16 +18 - +43 - - +24 +36 +61 - - Notes: The company started disclosing data on active users in March 2017. Active user data through February 2017 reflect Shared Research estimates with exception of August data. Order figures include orders at partner companies such as NTT Docomo and LINE. Order figures are rounded down to the nearest million yen from January 2020. Monthly orders are not shown from April 2020 as the company discontinued monthly disclosures, ending with the March 2020 report.

Number of orders divided by number of active users (approximate repeat order rate) Orders / Active users Sep Oct Nov Dec Jan Feb Mar AprMay Jun Jul Aug Q1 Q2 Q3 Q4FY FY08/16 ------0.67 0.64 0.64 0.60 0.67 0.69 - - 1.90 1.90 7.05 FY08/17 0.63 0.65 0.66 0.76 0.74 0.66 0.70 0.66 0.64 0.61 0.71 0.72 1.91 2.08 1.95 2.00 7.35 FY08/18 0.66 0.74 0.71 0.81 0.81 0.75 0.80 0.73 0.77 0.76 0.81 0.81 2.08 2.33 2.28 2.35 8.67 FY08/19 0.78 0.75 0.78 0.95 0.91 0.83 0.89 0.80 0.81 0.83 0.83 0.90 2.29 2.65 2.46 2.52 9.48 FY08/20 0.78 0.77 0.80 0.89 0.86 0.86 0.94 - - - - - 2.31 2.57 2.89 - - FY08/17 YoY ------5.1% 3.4% 0.2% 2.0% 6.1% 4.2% - - 2.7% 5.3% 4.3% FY08/18 YoY 5.3% 14.1% 8.4% 6.8% 10.3% 14.9% 14.2% 11.4% 20.7% 24.0% 14.5% 13.8% 8.4% 12.2% 16.6% 17.7% 17.9% FY08/19 YoY 18.1% 1.5% 9.6% 17.2% 11.6% 9.6% 10.9% 9.0% 4.1% 9.8% 2.5% 10.3% 10.5% 13.9% 7.9% 7.0% 9.4% FY08/20 YoY -0.01% 1.5% 3.2% -6.3% -5.3% 3.9% 5.7% - - - - - 0.5% -3.2% 17.4% - - Source: Shared Research based on company data

51/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

infrastructure essential to the future of Japan” rather than a simple food delivery service. By enhancing the content of its disclosures, including consolidated results, medium-term growth strategies, and non-financial information, the company is looking to further enhance the quality of information it provides and work proactively to promote a better understanding of its enterprise value.

Mail Order business In Q3, the Mail order business reported revenue of JPY135mn (-58.2% YoY) and operating profit of JPY13mn (-80.1% YoY). Demand dropped sharply, with key customers such as izakaya (bars) affected significantly by consumers refraining from making unnecessary trips outside the home. The company thinks that the recovery in revenue will be proportionate with moves to unwind self-isolation, and that it may take some time.

Grubhub inc. FY12/18 FY12/19 FY12/20 (USDmn) Q1Q2Q3Q4Q1Q2Q3Q4 Q1 Revenue 233 240 247 288 324 325 322 341 363 YoY 49.0% 51.0% 51.6% 40.3% 39.2% 35.6% 30.3% 18.6% 12.1% Total costs 201 205 225 290 315 319 318 366 409 YoY 53.3% 50.3% 54.8% 62.3% 56.7% 55.3% 41.3% 26.0% 29.8% % of revenue 86.4% 85.7% 91.2% 101.0% 97.3% 98.1% 98.9% 107.3% 112.6% Pre-tax profit 32 34 22 -5 914-31 -46 YoY 26.3% 55.3% 25.4% - -72.0% -98.1% -83.6% -- Pre-tax profit margin 13.6% 14.3% 8.8% -1.7% 2.7% 0.2% 1.1% -9.1% -12.6% Income taxes -0 4 -1 0 -1 -1 -3 -3 -19 Implied tax rate -0.7% 12.2% -5.6% -4.7% -9.8% -92.6% -96.1% 10.6% 41.1% Net income attributable to owners of parent 31 30 23 -5 711-28 -33 Active Diners (mn) 15.08 15.58 16.38 17.69 19.29 20.29 21.20 22.62 23.89 YoY 72.3% 69.8% 67.0% 22.3% 27.9% 30.2% 29.4% 27.9% 23.9% No. of orders / Average no. of users 2.7 2.5 2.4 2.5 2.5 2.2 2.0 2.1 2.0 YoY -22.9% -21.2% -18.9% -15.2% -4.7% -10.5% -15.3% -16.4% -20.4% Daily Average Grubs ('000) 437 423 416 468 521 489 457 503 516 DAG x No. of days (mn) 39.32 38.51 38.27 43.01 46.89 44.49 42.07 46.24 46.98 YoY 34.6% 34.8% 36.6% 19.1% 19.2% 15.5% 9.9% 7.5% 0.2% Gross food sales 1,245 1,220 1,215 1,377 1,502 1,459 1,400 1,552 1,630 YoY 38.6% 38.7% 40.0% 20.9% 20.7% 19.6% 15.3% 12.7% 8.5% Source: Shared Research based on publicly disclosed data

Because Uber was listed in 2019 (NYSE: UBER), Uber Eats figures (on a global basis) are shown for reference.

Uber Eats (Worldwide) FY12/18 FY12/19 FY12/20 (USDmn) Q1Q2Q3Q4Q1Q2Q3Q4 Q1 Revenue 283 346 394 437 536 595 645 734 819 YoY 241.0% 186.0% 141.7% 98.6% 89.4% 72.0% 63.7% 68.0% 52.8% Excess driver incentives 97 124 200 266 291 253 247 315 292 YoY 106.4% 195.2% 284.6% 285.5% 200.0% 104.0% 23.5% 18.4% 0.3% % of revenue 34.3% 35.8% 50.8% 60.9% 54.3% 42.5% 38.3% 42.9% 35.7% Driver referrals 323665642 YoY - -50.0% -25.0% -86.0% 100.0% 150.0% 100.0% -33.3% -66.7% % of revenue 3.1% 1.6% 1.5% 2.3% 2.1% 2.0% 2.4% 1.3% 0.7% Adjusted net revenue 183 220 191 165 239 337 392 415 527 YoY 454.5% 193.3% 78.5% 11.5% 30.6% 53.2% 105.2% 151.5% 120.5% % of revenue 64.7% 63.6% 48.5% 37.8% 44.6% 56.6% 60.8% 56.5% 64.3% Source: Shared Research based on publicly disclosed data

52/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Q2 FY08/20 results Overview

▷ For the three months of Q2 FY08/20, the company reported consolidated revenue of JPY2.0bn (+19.3% YoY), an operating loss of JPY779mn (versus loss of JPY143mn in Q2 FY08/19), and a net loss of JPY684mn (versus loss of JPY125mn in Q2 FY08/19). ▷ Along with Q2 results, the company announced that it entered into an agreement to form a business and capital alliance with LINE Corp. (unlisted), and that it also entered into a separate agreement under which it would issue new shares to LINE Corp. and Mirai Fund Limited Liability Partnership via a private placement, and that this new share issue would result in changes to its principal shareholder and controlling company. The new share issue will generate JPY30.0bn in new equity capital. For further details, see the “Medium-term Business Plan” section later in this report. ▷ On the same day, the company rescinded its previous forecast (announced October 10, 2019), explaining that, because it was entering into a capital and business alliance, it was still in the progress of conferring with its new alliance partner as to what level of synergies might be expected to be realized this fiscal year. While unable to provide any earnings forecast at this time, the company indicated that would provide a new forecast as soon as it was in a position to do so, and was expecting to have a new forecast ready for release to the public prior to the extraordinary general meeting of shareholders that is expected to take place sometime in and after June 2020. ▷ In order to foster a closer working relationship with LINE Corp. in the context of the new capital and business alliance and strengthen its management structure, Demae-can is proposing a move to a structure employing two representative directors, with current Demae-can president and representative director Rie Nakamura assuming the position of chairman and

representative director, and LINE Corp. executive officer Hideo Fujii coming in to serve as the new Demae-can president and representative director. Once payment for the newly issued shares is received from LINE Corp. and Mirai Fund, current Demae- can president and representative director Rie Nakamura is slated to assume a new position as Demae-can chairman and

representative director, and LINE Corp. executive officer Hideo Fujii is slated to assume a new position as Demae-can president and representative director, pending approval at the extraordinary shareholders meeting and the subsequent adoption of a resolution by Demae-can’s Board of Directors.

53/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

By segment FY08/18 FY08/19 FY 08/ 20 Cumulative (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Sales 1,207 2,569 4,005 5,431 1,434 3,120 4,847 6,666 1,817 3,829 YoY -0.3% 1.7% 5.1% 9.8% 18.8% 21.4% 21.0% 22.7% 26.8% 22.7% Demae-can 859 1,878 2,978 4,078 1,117 2,462 3,867 5,395 1,510 3,216 YoY 2.1% 6.0% 10.2% 16.5% 30.0% 31.1% 29.9% 32.3% 35.2% 30.6% Mail Order 348 691 1,027 1,353 317 657 980 1,271 307 613 YoY -5.6% -8.3% -7.3% -6.4% -8.9% -4.8% -4.5% -6.1% -3.1% -6.7% Adjustments -45 -97 -147 -200 -54 -120 -190 -265 -64 -143 Operating profit 206 341 560 837 103 -40 24 -39 -210 -989 YoY -2.5% -8.4% -11.2% 4.6% -50.1% - -95.7% - - - Operating profit margin 17.1% 13.3% 14.0% 15.4% 7.2% - 0.5% - - - Demae-can 222 365 591 863 114 -33 31 -18 -183 -936 YoY -4.5% -9.3% -12.2% 1.1% -48.6% - -94.8% - - - Operating profit margin 25.8% 19.4% 19.9% 21.2% 10.2% -1.3% 0.8% -0.3% -12.1% -29.1% Mail Order 49 107 164 218 42 106 170 224 45 98 YoY -27.4% -26.0% -20.3% -15.7% -13.7% -1.6% 4.0% 2.8% 7.8% -6.9% Operating profit margin 14.0% 15.6% 15.9% 16.1% 13.3% 16.1% 17.4% 17.6% 14.8% 16.1% Adjustments -64 -132 -195 -244 -53 -113 -177 -246 -73 -151 By segment FY08/18 FY 08/ 19 FY08/20 Quarterly (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 Sales 1,207 1,362 1,436 1,426 1,434 1,686 1,728 1,819 1,817 2,011 YoY -0.3% 3.5% 11.8% 25.8% 18.8% 23.8% 20.3% 27.6% 26.8% 19.3% Demae-can 859 1,019 1,100 1,100 1,117 1,346 1,405 1,528 1,510 1,706 YoY 2.1% 9.5% 18.3% 38.1% 30.0% 32.0% 27.7% 38.9% 35.2% 26.7% Mail Order 348 343 336 326 317 340 323 291 307 306 YoY -5.6% -10.9% -5.2% -3.1% -8.9% -0.7% -3.9% -10.8% -3.1% -10.2% Adjustments -45 -52 -51 -53 -54 -66 -70 -76 -64 -78 Operating profit 206 135 219 277 103 -143 64 -63 -210 -779 YoY -2.5% -16.2% -15.2% 63.4% -50.1% - -70.8% - - - Operating profit margin 17.1% 9.9% 15.3% 19.4% 7.2% - 3.7% - - - Demae-can 222 144 226 272 114 -147 64 -48 -183 -754 YoY -4.5% -15.8% -16.6% 50.7% -48.6% - -71.9% - - - Operating profit margin 25.8% 14.1% 20.6% 24.7% 10.2% -10.9% 4.5% -3.2% -12.1% -44.2% Mail Order 49 59 56 55 42 64 64 54 45 53 YoY -27.4% -24.8% -6.4% 1.8% -13.7% 8.5% 14.7% -1.0% 7.8% -16.6% Operating profit margin 14.0% 17.1% 16.7% 16.8% 13.3% 18.7% 19.9% 18.6% 14.8% 17.4% Adjustments -64 -67 -63 -50 -53 -60 -64 -69 -73 -79 Source: Shared Research based on company data

Demae-can business For the three months of Q2 FY08/20, the mainstay Demae-can business reported revenue of JPY1.7bn (+26.7% YoY) and an operating loss of JPY754mn (versus loss of JPY147mn in Q2 FY08/19).

54/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Operating performance Demae-can FY08/18 FY08/19 FY08/20 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 Revenue 859 1,019 1,100 1,100 1,117 1,346 1,405 1,528 1,510 1,706 YoY 2.1% 9.5% 18.3% 38.1% 30.0% 32.0% 27.7% 38.9% 35.2% 26.7% Operating profit 222 144 226 272 114 -147 64 -48 -183 -754 YoY -4.5% -15.8% -16.6% 50.7% -48.6% - -71.9% --- Operating profit margin 25.8% 14.1% 20.6% 24.7% 10.2% -10.9% 4.5% -3.2% -12.1% -44.2% Order processing fees 563 679 677 716 703 855 819 879 822 944 YoY 35.7% 35.1% 36.1% 36.7% 24.9% 26.0% 21.0% 22.7% 17.0% 10.4% No. of orders (mn) 5.08 5.94 5.97 6.33 6.28 7.48 7.13 7.55 7.15 8.23 YoY 34.1% 34.6% 36.4% 34.8% 23.6% 25.9% 19.5% 19.3% 13.7% 10.0% Order processing fees / No. of orders 110.7 114.3 113.4 113.1 111.9 114.3 114.8 116.3 115.0 114.7 YoY 1.2% 0.4% -0.2% 1.4% 1.1% 0.0% 1.3% 2.9% 2.8% 0.3% No. of affiliat ed st ores (quart er-end) 15,712 16,081 16,439 17,207 17,834 18,572 19,452 19,911 20,720 21,450 YoY 10.6% 10.5% 9.9% 12.3% 13.5% 15.5% 18.3% 15.7% 16.2% 15.5% No. of orders / No. of affiliat ed st ores 327.7 373.5 367.3 376.3 358.7 410.8 375.2 383.7 351.8 390.3 YoY 20.4% 21.8% 23.8% 21.3% 9.4% 10.0% 2.2% 2.0% -1.9% -5.0% No. of active users (quarter-end; mn) 2.45 2.55 2.62 2.69 2.74 2.82 2.90 3.00 3.10 3.20 YoY 23.7% 20.0% 17.0% 14.5% 11.8% 10.6% 10.7% 11.5% 13.1% 13.5% No. of orders / Average no. of users 2.1 2.4 2.3 2.4 2.3 2.7 2.5 2.6 2.3 2.6 YoY 8.9% 10.5% 15.2% 16.5% 9.2% 13.3% 8.0% 7.4% 1.2% -2.9% No. of Sharing Delivery bases 17 23 33 60 78 104 161 215 239 275 YoY - - 1,550.0% 500.0% 358.8% 352.2% 387.9% 258.3% 206.4% 164.4% Depreciation 36 38 42 46 49 56 60 65 69 74 EBITDA 257 182 268 317 163 -91 123 16 -114 -679 YoY -12.1% -21.1% -14.9% 46.1% -36.7% - -54.0% -94.8% - - EBITDA margin 30.0% 17.8% 24.4% 28.9% 14.6% -6.8% 8.8% 1.1% -7.5% -39.8% Source: Shared Research based on company data

Key performance indicators In Q2, KPIs for the Demae-can business were as follows:

▷ Orders: 8.23mn (+10.0% YoY) ▷ Affiliated stores: 21,450 (+15.5% YoY) ▷ Active users: 3.2mn (+13.5% YoY) ▷ Delivery bases (Sharing Delivery bases): 275, up 36 versus the end of November 2019

The Demae-can business reported the following KPIs for the month of March 2020 (the first month in Q3 FY08/20):

▷ Orders: 3.03mn (+21% YoY) ▷ Affiliated stores: 21,609 (+15% YoY) ▷ Active users: 3.25mn (+14% YoY) ▷ Delivery bases (Sharing Delivery bases): 293, up 54 versus the end of November 2019

Impact of novel coronavirus pandemic on the company’s business From its origin in the province of Wuhan, China, the novel coronavirus disease (COVID-19) has spread around the world and, in Japan, has prompted the government to declare a nationwide state of emergency, asking all people to voluntarily refrain from making unnecessary trips outside their homes and requesting that restaurants shorten their operating hours.

With the number of people going out to eat at restaurants declining in the wake of this stay-at-home order from the Japanese government, delivery services have been attracting more attention, and Demae-can itself is reporting a jump in the number of restaurants seeking to become affiliates. During its Q2 results presentation, the company was asked about trends in new affiliated restaurants. In its reply, the company said the number of inquiries it is receiving from restaurants interested in becoming affiliates is running three to four times higher than usual, and that the influx of new affiliates from this recent jump in inquiries would start showing up in its affiliated restaurant count starting in April.

At the local government level, some cities have gone so far as to provide various subsidies/concessions for takeout food delivery services and/or their users as part of an overall effort to help restaurants that have been heavily impacted by the Japanese

55/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

government’s stay-at-home order. For its part, Demae-can has implemented the following measures in response to the current situation:

To its delivery service users, Demae-can is recommending cashless payments to facilitate deliveries that do not require direct human contact (with the food being delivered to the front door) and further reduce the chances of spreading the virus.

To its affiliated restaurants, Demae-can is offering help with promotions to increase demand for food deliveries. It is also providing additional support for restaurant operations through its emergency employee sharing program, which it utilizes to temporary hire the employees of affiliated restaurants that have expressed interest as delivery drives.

To its delivery staff, Demae-can is providing constant protection from infection throughout the day by providing all necessary sanitation materials (including masks, disinfectants, etc.), adopting strict sanitation management practices (including requiring employees to disinfect their hands with alcohol and monitoring employees’ body temperatures for signs of fever), and actively promoting cashless payments to facilitate deliveries that require no direct human contact. The company is also further reducing the risk of its employees becoming infected by hiring more delivery personnel capable of working locally and making other arrangements that allow employees to commute without having to use public transportation.

Measures concerning delivery bases (Sharing Delivery bases) The company is working to reduce the delivery charges of its Sharing Delivery service as part of an overall effort to increase usage. Despite these efforts, about 70% of the local delivery hubs operated by partner companies will continue to operate under existing agreements.

The company confirmed that its target of 300 delivery bases (Sharing Delivery bases) by the end of FY08/20 still looks achievable, adding that the COVID-19 pandemic and related mitigation measures were not expected to have any impact on its plans in this regard.

As of the end of February 2020, the company reported that only about 15% of its affiliated restaurants were using its Sharing Delivery service and roughly 85% were still handling their own deliveries. After a few more years, the company is looking to raise the proportion of affiliated restaurants using its Sharing Delivery service to above 50%.

The company had a total of approximately 1,600 delivery drivers as of the end of February 2020, but was able to push this number up to more than 2,000 by the end of March.

Mail Order business For Q2 FY08/20, the Mail order business reported revenue of JPY306mn (-10.2% YoY) and operating profit of JPY53mn (-16.6% YoY).

Mail Order FY08/18 FY08/19 FY08/20 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 Sales 348 343 336 326 317 340 323 291 307 306 YoY -5.6% -10.9% -5.2% -3.1% -8.9% -0.7% -3.9% -10.8% -3.1% -10.2% Internal transaction 45 52 51 53 54 66 70 76 64 78 Sales (incl. internal transaction) 393 394 387 379 371 407 393 366 372 384 Operating profit 49 59 56 55 42 64 64 54 45 53 YoY -27.4% -24.8% -6.4% 1.8% -13.7% 8.5% 14.7% -1.0% 7.8% -16.6% Operating profit margin 14.0% 17.1% 16.7% 16.8% 13.3% 18.7% 19.9% 18.6% 14.8% 17.4% Depreciation 3344444444 Amortization of goodwill 26 26 17 ------EBITDA 77 88 77 59 46 68 68 58 49 57 YoY -18.2% -17.1% -12.6% -29.5% -40.5% -22.6% -11.3% -0.7% 7.0% -15.7% EBITDA margin 22.2% 25.6% 22.9% 18.1% 14.5% 19.9% 21.2% 20.1% 16.1% 18.7% Source: Shared Research based on company data

56/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Demae-can FY08/18 FY08/19 FY08/20 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1 Q2 Revenue 1,207 1,362 1,436 1,426 1,434 1,686 1,728 1,819 1,817 2,011 YoY -0.3% 3.5% 11.8% 25.8% 18.8% 23.8% 20.3% 27.6% 26.8% 19.3% Total costs 997 1,233 1,201 1,160 1,306 1,851 1,653 1,881 2,019 2,675 YoY -1.5% 2.0% 17.6% 14.7% 31.0% 50.1% 37.6% 62.2% 54.6% 44.6% % of sales 82.6% 90.5% 83.7% 81.3% 91.1% 109.8% 95.7% 103.4% 111.1% 133.0% Pre-tax profit 210 129 235 266 128 -164 74 -62 -202 -664 YoY 5.9% 21.1% -10.9% 117.4% -39.2% - -68.3% - -- Pre-tax profit margin 17.4% 9.5% 16.3% 18.7% 8.9% -9.8% 4.3% -3.4% -11.1% -33.0% Income taxes 69 46 71 97 36 -40 48 34 19 20 Implied tax rate 32.7% 35.6% 30.2% 36.3% 28.3% 24.1% 64.1% -55.1% -9.2% -2.6% Non-cont rolling int erest s -1 -0 0 -0 ------Net income attributable to owners of parent 142 83 164 170 92 -125 27 -97 -221 -684 YoY 18.7% 34.2% -16.2% 204.6% -35.4% - -83.7% - -- Net margin 11.7% 6.1% 11.4% 11.9% 6.4% -7.4% 1.5% -5.3% -12.1% -34.0% No. of active users (quarter end; mn) 2.45 2.55 2.62 2.69 2.74 2.82 2.90 3.00 3.10 3.20 YoY 23.7% 20.0% 17.0% 14.5% 11.8% 10.6% 10.7% 11.5% 13.1% 13.5% No. of orders / No. of active users 2.1 2.4 2.3 2.4 2.3 2.7 2.5 2.6 2.3 2.6 YoY 8.9% 10.5% 15.2% 16.5% 9.2% 13.3% 8.0% 7.4% 1.2% -2.9% No. of orders (mn) 5.08 5.94 5.97 6.33 6.28 7.48 7.13 7.55 7.15 8.23 YoY 34.1% 34.6% 36.4% 34.8% 23.6% 25.9% 19.5% 19.3% 13.7% 10.0% No. of affiliated stores (quarter end) 15,712 16,081 16,439 17,207 17,834 18,572 19,452 19,911 20,720 21,450 YoY 10.6% 10.5% 9.9% 12.3% 13.5% 15.5% 18.3% 15.7% 16.2% 15.5%

Grubhub inc. FY12/18 FY12/19 FY12/20 (USDmn) Q4Q1Q2Q3Q4Q1Q2Q3Q4 Q1 Revenue 205 233 240 247 288 324 325 322 341 - YoY 49.2% 49.0% 51.0% 51.6% 40.3% 39.2% 35.6% 30.3% 18.6% - Total costs 179 201 205 225 290 315 319 318 366 - YoY 56.7% 53.3% 50.3% 54.8% 62.3% 56.7% 55.3% 41.3% 26.0% - % of revenue 87.2% 86.4% 85.7% 91.2% 101.0% 97.3% 98.1% 98.9% 107.3% - Pre-tax profit 25 32 34 22 -5 914-31 - YoY 8.2% 26.3% 55.3% 25.4% - -72.0% -98.1% -83.6% -- Pre-tax profit margin 12.3% 13.6% 14.3% 8.8% -1.7% 2.7% 0.2% 1.1% -9.1% - Income taxes -28 -0 4 -1 0 -1 -1 -3 -3 - Implied tax rate -112.8% -0.7% 12.2% -5.6% -4.7% -9.8% -92.6% -96.1% 10.6% - Net income attributable to owners of parent 54 31 30 23 -5 711-28 - Active Diners (mn) 14.46 15.08 15.58 16.38 17.69 19.29 20.29 21.20 22.62 - YoY 76.9% 72.3% 69.8% 67.0% 22.3% 27.9% 30.2% 29.4% 27.9% - No. of orders / Average no. of users 3.0 2.7 2.5 2.4 2.5 2.5 2.2 2.0 2.1 - YoY -12.3% -22.9% -21.2% -18.9% -15.2% -4.7% -10.5% -15.3% -16.4% - Daily Average Grubs ('000) 393 437 423 416 468 521 489 457 503 - DAG x No. of days (mn) 36.11 39.32 38.51 38.27 43.01 46.89 44.49 42.07 46.24 - YoY 34.2% 34.6% 34.8% 36.6% 19.1% 19.2% 15.5% 9.9% 7.5% - Gross food sales 1,139 1,245 1,220 1,215 1,377 1,502 1,459 1,400 1,552 - YoY 39.2% 38.6% 38.7% 40.0% 20.9% 20.7% 19.6% 15.3% 12.7% - Source: Shared Research based on publicly disclosed data

Because Uber was listed in 2019 (NYSE: UBER), Uber Eats figures (on a global basis) are shown for reference. Uber Eats (Worldwide) FY12/18 FY12/19 FY12/20 (USDmn) Q4Q1Q2Q3Q4Q1Q2Q3Q4 Q1 Revenue 220 283 346 394 437 536 595 645 734 YoY - 241.0% 186.0% 141.7% 98.6% 89.4% 72.0% 63.7% 68.0% - Excess driver incentives 69 97 124 200 266 291 253 247 315 YoY - 106.4% 195.2% 284.6% 285.5% 200.0% 104.0% 23.5% 18.4% - % of revenue - 34.3% 35.8% 50.8% 60.9% 54.3% 42.5% 38.3% 42.9% - Driver referrals 4332366564 YoY -- -50.0% -25.0% -86.0% 100.0% 150.0% 100.0% -33.3% - % of revenue - 3.1% 1.6% 1.5% 2.3% 2.1% 2.0% 2.4% 1.3% - Adjusted net revenue 148 183 220 191 165 239 337 392 415 YoY - 454.5% 193.3% 78.5% 11.5% 30.6% 53.2% 105.2% 151.5% - % of revenue - 64.7% 63.6% 48.5% 37.8% 44.6% 56.6% 60.8% 56.5% - Source: Shared Research based on publicly disclosed data

57/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Q1 FY08/20 results Overview

▷ In Q1 FY08/20, the company reported consolidated revenue of JPY1.8bn (+26.8% YoY), an operating loss of JPY210mn (versus operating profit of JPY103mn in Q1 FY08/19), and a net loss attributable to owners of the parent of JPY221mn (versus net income of JPY92mn).

Demae-can business Demae-can FY08/18 FY08/19 FY08/20 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1 Revenue 859 1,019 1,100 1,100 1,117 1,346 1,405 1,528 1,510 YoY 2.1% 9.5% 18.3% 38.1% 30.0% 32.0% 27.7% 38.9% 35.2% Operating profit 222 144 226 272 114 -147 64 -48 -183 YoY -4.5% -15.8% -16.6% 50.7% -48.6% - -71.9% -- Operating profit margin 25.8% 14.1% 20.6% 24.7% 10.2% -10.9% 4.5% -3.2% -12.1% Order processing fees 563 679 677 716 703 855 819 879 822 YoY 35.7% 35.1% 36.1% 36.7% 24.9% 26.0% 21.0% 22.7% 17.0% No. of orders (mn) 5.08 5.94 5.97 6.33 6.28 7.48 7.13 7.55 7.15 YoY 34.1% 34.6% 36.4% 34.8% 23.6% 25.9% 19.5% 19.3% 13.7% Order processing fees / No. of orders 110.7 114.3 113.4 113.1 111.9 114.3 114.8 116.3 115.0 YoY 1.2% 0.4% -0.2% 1.4% 1.1% 0.0% 1.3% 2.9% 2.8% No. of affiliat ed st ores (quart er-end) 15,712 16,081 16,439 17,207 17,834 18,572 19,452 19,911 20,720 YoY 10.6% 10.5% 9.9% 12.3% 13.5% 15.5% 18.3% 15.7% 16.2% No. of orders / No. of affiliated stores 327.7 373.5 367.3 376.3 358.7 410.8 375.2 383.7 351.8 YoY 20.4% 21.8% 23.8% 21.3% 9.4% 10.0% 2.2% 2.0% -1.9% No. of active users (quarter-end; mn) 2.45 2.55 2.62 2.69 2.74 2.82 2.90 3.00 3.10 YoY 23.7% 20.0% 17.0% 14.5% 11.8% 10.6% 10.7% 11.5% 13.1% No. of orders / Average no. of users 2.1 2.4 2.3 2.4 2.3 2.7 2.5 2.6 2.3 YoY 8.9% 10.5% 15.2% 16.5% 9.2% 13.3% 8.0% 7.4% 1.2% No. of Sharing Delivery bases 17 23 33 60 78 104 161 215 239 YoY - - 1,550.0% 500.0% 358.8% 352.2% 387.9% 258.3% 206.4% Depreciation 36 38 42 46 49 56 60 65 69 EBITDA 257 182 268 317 163 -91 123 16 -114 YoY -12.1% -21.1% -14.9% 46.1% -36.7% - -54.0% -94.8% - EBITDA margin 30.0% 17.8% 24.4% 28.9% 14.6% -6.8% 8.8% 1.1% -7.5% Source: Shared Research based on company data

In Q1, the mainstay Demae-can business logged revenue of JPY1.5bn (+35.2% YoY) and an operating loss of JPY183mn (versus operating profit of JPY114mn in Q1 FY08/19).

Key performance indicators In Q1, KPIs for the Demae-can business were as follows:

▷ Orders: 7.2mn (+13.7% YoY) ▷ Affiliated restaurants: 20,720 (+16.2% YoY) ▷ Active users: 3.1mn (+13.1% YoY) ▷ Delivery bases (Sharing Delivery bases): 239, up by 24 from end-August 2019

The company states that affiliated restaurant, active user, and delivery base (Sharing Delivery base) numbers are all in line with the company forecast. However, it also indicated that orders were slightly below forecast. The company claims that this was mostly due to a repeat order rate that did not improve as much as the company had expected and orders from partner sites that were below projections.

Sharing Delivery The company plans to dissolve its business partnership with Asahi Shimbun effective June 14, 2020.

58/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Other

▷ In October 2019, consumption tax rates in Japan were changed, with the rate for food delivery remaining at eight percent and the rate for dine-in food increasing to 10%. This is a relatively favorable environment for the company, but no major changes to KPIs have been noted since the consumption tax rates were adjusted. The company claims that the Japanese government’s Cashless Point Return Program (returns 2–5% of the value of cashless purchases made at SMEs and other businesses), which will continue until June 2020, is behind the lack of change. Demae-can believes that food delivery utilization will see more

growth after this program ends. ▷ On November 1, 2019, the company updated the Demae-can Amazon Alexa skill, making it easier than before for users to order food deliveries using just their voices. Coinciding with this move, the company conducted a joint promotional campaign

with Amazon for orders using Alexa. Orders through Alexa were higher than expected, resulting in a temporary system failure. However, the company mentions that the promotion was more effective than expected in terms of raising recognition of the Demae-can Amazon Alexa skill.

Mail Order business In Q1 FY08/20, revenue was JPY307mn (-3.1% YoY) and operating profit JPY45mn (+7.8% YoY). Mail Order FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Sales 369 384 355 336 348 343 336 326 317 340 323 291 307 YoY -12.4% -12.2% -15.6% -4.9% -5.6% -10.9% -5.2% -3.1% -8.9% -0.7% -3.9% -10.8% -3.1% Internal transaction 35 40 38 40 45 52 51 53 54 66 70 76 64 Sales (incl. internal transaction) 403 425 393 376 393 394 387 379 371 407 393 366 372 Operating profit 67 78 60 54 49 59 56 55 42 64 64 54 45 YoY 34.7% 51.8% -3.0% -0.5% -27.4% -24.8% -6.4% 1.8% -13.7% 8.5% 14.7% -1.0% 7.8% Operating profit margin 18.2% 20.3% 16.9% 16.0% 14.0% 17.1% 16.7% 16.8% 13.3% 18.7% 19.9% 18.6% 14.8% Depreciation 22343344 4444 4 Amortization of goodwill 26 26 26 26 26 26 17 ------EBITDA 95 106 88 83 77 88 77 59 46 68 68 58 49 YoY 21.8% 33.6% -1.4% 2.0% -18.2% -17.1% -12.6% -29.5% -40.5% -22.6% -11.3% -0.7% 7.0% EBITDA margin 25.7% 27.5% 24.8% 24.8% 22.2% 25.6% 22.9% 18.1% 14.5% 19.9% 21.2% 20.1% 16.1% Source: Shared Research based on company data

59/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Comparable US companies In Japan, direct competitor Uber Eats (Japanese operations) is not listed and Rakuten Delivery is part of Rakuten (TSE1: 4755), so data are difficult to obtain. A growing US company operating the same business model as Yume no Machi is Grubhub, Inc. (NYSE: GRUB). We compared Demae-can and Grubhub. Demae-can FY08/17 FY08/18 FY08/19 FY08/20 (JPYmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Revenue 1,210 1,316 1,285 1,133 1,207 1,362 1,436 1,426 1,434 1,686 1,728 1,819 1,817 YoY 27.5% 24.2% 23.9% 2.2% -0.3% 3.5% 11.8% 25.8% 18.8% 23.8% 20.3% 27.6% 26.8% Total costs 1,012 1,209 1,021 1,011 997 1,233 1,201 1,160 1,306 1,851 1,6531,8812,019 YoY 25.4% 35.7% 23.2% -0.3% -1.5% 2.0% 17.6% 14.7% 31.0% 50.1% 37.6% 62.2% 54.6% % of sales 83.6% 91.9% 79.5% 89.2% 82.6% 90.5% 83.7% 81.3% 91.1% 109.8% 95.7% 103.4% 111.1% Pre-tax profit 198 107 264 123 210 129 235 266 128 -164 74 -62 -202 YoY 39.3% -36.8% 26.4% 28.8% 5.9% 21.1% -10.9% 117.4% -39.2% - -68.3% - - Pre-tax profit margin 16.4% 8.1% 20.5% 10.8% 17.4% 9.5% 16.3% 18.7% 8.9% -9.8% 4.3% -3.4% -11.1% Income taxes 79 45 69 67 69 46 71 97 36 -40 48 34 19 Implied tax rate 40.0% 42.3% 26.1% 55.1% 32.7% 35.6% 30.2% 36.3% 28.3% 24.1% 64.1% -55.1% -9.2% Non-controlling interests -0 -1 -1 -1 -1 -0 0 -0 ----- Net income attributable to owners of parent 119 62 195 56 142 83 164 170 92 -125 27 -97 -221 YoY 30.1% -42.8% 38.7% 762.2% 18.7% 34.2% -16.2% 204.6% -35.4% - -83.7% - - Net margin 9.9% 4.7% 15.2% 4.9% 11.7% 6.1% 11.4% 11.9% 6.4% -7.4% 1.5% -5.3% -12.1% No. of active users (quarter end; mn) 1.98 2.13 2.24 2.35 2.45 2.55 2.62 2.69 2.74 2.82 2.90 3.00 3.10 YoY - - 23.2% 22.4% 23.7% 20.0% 17.0% 14.5% 11.8% 10.6% 10.7% 11.5% 13.1% No. of orders / No. of active users 1.9 2.1 2.0 2.0 2.1 2.4 2.3 2.4 2.3 2.7 2.5 2.6 2.3 YoY - - - 5.0% 8.9% 10.5% 15.2% 16.5% 9.2% 13.3% 8.0% 7.4% 1.3% No. of orders (mn) 3.79 4.41 4.38 4.70 5.08 5.94 5.97 6.33 6.28 7.48 7.13 7.55 7.15 YoY 29.7% 26.0% 26.5% 28.9% 34.1% 34.6% 36.4% 34.8% 23.6% 25.9% 19.5% 19.3% 13.8% No. of affiliated stores (quarter end) 14,206 14,559 14,953 15,318 15,712 16,081 16,439 17,207 17,834 18,572 19,452 19,911 20,720 YoY 13.6% 16.2% 14.9% 12.2% 10.6% 10.5% 9.9% 12.3% 13.5% 15.5% 18.3% 15.7% 16.2%

Grubhub inc. FY12/16 FY12/17 FY12/18 FY12/19 (USDmn) Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Revenue 137 156 159 163 205 233 240 247 288 324 325 322 - YoY 37.5% 39.1% 32.1% 32.1% 49.2% 49.0% 51.0% 51.6% 40.3% 39.2% 35.6% 30.3% - Total costs 114 131 137 146 179 201 205 225 290 315 319 318 - YoY 35.5% 38.2% 40.0% 41.8% 56.7% 53.3% 50.3% 54.8% 62.3% 56.7% 55.3% 41.3% - % of revenue 83.1% 84.0% 86.1% 89.3% 87.2% 86.4% 85.7% 91.2% 101.0% 97.3% 98.1% 98.9% - Pre-tax profit 23 25 22 17 25 32 34 22 -5 914 - YoY 48.6% 44.2% -1.9% -16.1% 8.2% 26.3% 55.3% 25.4% - -72.0% -98.1% -83.6% - Pre-tax profit margin 16.9% 16.0% 13.9% 10.7% 12.3% 13.6% 14.3% 8.8% -1.7% 2.7% 0.2% 1.1% - Income taxes 10774-28 -0 4 -1 0 -1 -1 -3 - Implied tax rate 41.3% 29.1% 33.2% 25.4% -112.8% -0.7% 12.2% -5.6% -4.7% -9.8% -92.6% -96.1% - Net income attributable to owners of parent 14 18 15 13 54 31 30 23 -5 711 - Active Diners (mn) 8.17 8.75 9.18 9.81 14.46 15.08 15.58 16.38 17.69 19.29 20.29 21.20 - YoY 21.2% 25.6% 24.8% 27.6% 76.9% 72.3% 69.8% 67.0% 22.3% 27.9% 30.2% 29.4% - No. of orders / Average no. of users 3.4 3.5 3.2 3.0 3.0 2.7 2.5 2.4 2.5 2.5 2.2 2.0 - YoY 0.5% -2.9% -7.5% -9.8% -12.3% -22.9% -21.2% -18.9% -15.2% -4.7% -10.5% -15.3% - Daily Average Grubs ('000) 293 325 314 305 393 437 423 416 468 521 489 457 - DAG x No. of days (mn) 26.91 29.21 28.56 28.01 36.11 39.32 38.51 38.27 43.01 46.89 44.49 42.07 - YoY 21.0% 19.8% 15.8% 13.8% 34.2% 34.6% 34.8% 36.6% 19.1% 19.2% 15.5% 9.9% - Gross food sales 818 898 880 867 1,139 1,245 1,220 1,215 1,377 1,502 1,459 1,400 - YoY 27.3% 26.0% 20.1% 18.0% 39.2% 38.6% 38.7% 40.0% 20.9% 20.7% 19.6% 15.3% - Source: Shared Research based on company data

Because Uber was listed in 2019 (NYSE: UBER), Uber Eats figures (on a global basis) are shown for reference.

Uber Eats (Worldwide) FY12/17 FY12/18 FY12/19 (USDmn) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Revenue 83 121 163 220 283 346 394 437 536 595 645 - YoY 241.0% 186.0% 141.7% 98.6% 89.4% 72.0% 63.7% - Excess driver incentives 47 42 52 69 97 124 200 266 291 253 247 - YoY 106.4% 195.2% 284.6% 285.5% 200.0% 104.0% 23.5% - % of revenue 34.3% 35.8% 50.8% 60.9% 54.3% 42.5% 38.3% - Driver referrals 344433236656 - YoY --50.0% -25.0% -86.0% 100.0% 150.0% 100.0% - % of revenue 3.1% 1.6% 1.5% 2.3% 2.1% 2.0% 2.4% - Adjusted net revenue 33 75 107 148 183 220 191 165 239 337 392 - YoY 454.5% 193.3% 78.5% 11.5% 30.6% 53.2% 105.2% - % of revenue 64.7% 63.6% 48.5% 37.8% 44.6% 56.6% 60.8% - Source: Shared Research based on company data

60/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

News and topics October 2020 On October 15, 2020, the company announced a change in its representative director.

Demae-can chairman and representative director Rie Nakamura will resign at the conclusion of the annual general meeting of shareholders scheduled to be held on November 26, 2020 due to the expiration of her term of office. As a result, the company will have only one representative director, Hideo Fujii, CEO. After the general meeting of shareholders, Ms. Nakamura will serve as an executive advisor to the company and will be involved in advising on organizational management, as well as activities to expand the delivery industry.

On the same day, the company announced its medium-term management plan.

The company formulated a new medium-term management plan spanning the three-year period from FY08/21 to FY08/23.

Medium-term targets FY08/21: Gross merchandise volume of JPY160.0bn (+56.0% YoY), revenue of JPY28.0bn, and an operating loss of JPY13.0bn FY08/22: Gross merchandise volume of JPY250.0bn (+56.0% YoY), revenue of JPY60.0bn, and an operating loss of JPY2.0bn FY08/23: Gross merchandise volume of JPY340.0bn (+36.0% YoY), revenue of JPY97.0bn, and operating profit of JPY12.0bn

Growth strategy

▷ Expanding the number of affiliated restaurants: Strengthen sales force to expand the number of affiliated restaurants to 100,000 by end-2022. ▷ Expanding the number of users: In addition to strengthening user communication through rebranding, the company plans to boost the number of users and promote the use of its service by maximizing marketing effectiveness through linkage with LINE ID. ▷ Expanding Sharing Delivery: The company aims to improve profitability over the medium-term by differentiating itself through delivery quality while also increasing population coverage from 30% to 50%.

August 2020 On August 19, 2020, the company announced comments on some news report.

A television news program (World Business Satellite) broadcast on August 18 reported that the company was considering acquiring Uber Eats, but the company commented that this was not true and not from its press release.

On August 18, 2020, the company announced the revision of its year-end dividend forecast (no dividend).

The company passed a resolution at a board meeting on August 18, 2020 in respect of its dividend forecast (no dividend) with August 31, 2020 set as the record date. The company's basic policy is to enhance enterprise value by strengthening the management base and improving management efficiency through proactive business development, and to return profits to shareholders on a consistent basis. The company’s approach is to invest actively in future growth while maintaining a dividend payout ratio of 30% in principle. The dividend policy is to aim for stable and consistent dividend payments.

The company has continued to invest aggressively to expand its market share in the Demae-can business in FY08/20. In March 2020, it has established a capital and business alliance with LINE Corporation. By securing sufficient funds for continuing and expanding investment and by developing closer relationships with LINE, the company is building a more stable management base for sustainable growth and medium- to long-term enhancement of enterprise value. The company thinks that it will be possible to further accelerate growth by consolidating the management resources of both companies, deepening mutual

61/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

utilization of resources, and strengthening the company's structure with personnel support from LINE. The company is currently discussing and considering with LINE the synergies available to the two companies, and hence it has not released a formal forecast for FY08/20.

Against this backdrop, the company has decided it will not pay a year-end dividend (no divided forecast announced previously) in order to prioritize investment in businesses.

April 2020 On April 24, 2020, the company announced that it specified a record date for voting rights in an extraordinary general meeting of shareholders.

▷ Record date: Tuesday, May 12, 2020 ▷ Planned date of extraordinary general meeting of shareholders: Friday, June 12, 2020 ▷ Proposal to be resolved at the extraordinary general meeting of shareholders: The appointment of two directors announced in two releases issued on March 26, 2020: “Notice of the Execution of the Capital and Business Alliance Agreement with LINE Corporation and Share Subscription Agreement with LINE Corporation and Mirai Fund LLP, Issuance of New Shares by way of

the Third-Party Allotment and Changes in Major Shareholder and Parent Company” and “Notice of Appointment of Director Candidates and Changes in Representative Directors”

On the same day, the company announced the completion of payments associated with new shares issued to LINE Corporation and Mirai Fund LLP via third-party allotment and changes to its principal shareholder and controlling company.

The company announced that it has received full payments associated with newly issued shares from LINE Corporation and Mirai Fund LLP (For more details, please see the relevant release from the company, dated March 26, 2020).

On April 6, 2020, the company announced management indicators for March 2020.

The company has up till now disclosed the latest key performance indicators of the Demae-can business on a monthly basis, but has decided to stop disclosing these monthly data with the March 2020 disclosure being the last. It has determined that making quarterly disclosures accompanied by appropriate explanations would be more relevant, as the company is promoting upfront spending aimed at creating “life infrastructure indispensable to the future of Japan, rather than simply being a food delivery service” in the long term. Through enhancing the content of its disclosures, e.g., consolidated earnings results, medium-term growth strategies, and non-financial information, the company intends to continue increasing the quality of information it transmits, partake in proactive communication activities, and work to promote understanding of its enterprise value.

March 2020 On March 26, 2020, the company announced earnings results for 1H FY08/20; see the results section for details.

On the same day, the company announced revisions to its full-year results forecast for FY08/20. To be precise, the company rescinded its previous forecast (announced on October 10, 2019) because it had entered a capital and business alliance (detailed below) and was still conferring with its new partner to determine what level of synergies it can expect to achieve during this FY08/20. While unable to provide any earnings forecast at this time, the company indicated that it would provide a new forecast as soon as possible.

On the same day, the company announced that it had signed an agreement to form a business and capital alliance with LINE Corp. (unlisted) and that it had also entered into a separate agreement under which LINE Corp. and Mirai Fund Limited Liability Partnership will underwrite its issuance of new shares through third-party allotment (private placement), which in turn would lead to changes in the company’s principal shareholder and controlling company.

62/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Overview of new share issue The company expects to raise a total of JPY30.0bn from the issue of new shares. The proceeds are expected to be put to use during the period running from May 2020 to August 2023. Plans call for JPY5.9bn to be used for investments in system upgrades and development, and most of the remainder for working capital, including JPY16.1bn for marketing expenses and JPY7.7bn for additions to the company’s delivery staff. The issue of new shares will cause considerable dilution of 100.39% in common shares (not counting treasury shares) compared to the end of August 2019. The company arrived at the issue price of JPY730 per share through discussions and negotiations with other parties involved. This share price represents a premium of 5.19% over the closing price of JPY694 for Demae-can common shares on the Tokyo Stock Exchange on the trading day before the day the Board of Directors approved this issue of new shares through private placement.

1) Expand the number of directly managed delivery hubs and strengthen the Sharing Delivery service to enable it to compete against delivery service providers 2) Expand its sales team in order to bring in more new customers 3) Increase its advertising efficiency ratio by creating a more effective marketing strategy 4) Upgrade systems 5) Expand its “Cloud Kitchen” operations and expand into new takeout food delivery territories 6) Increase the efficiency of delivery operations The company had previously come to the recognition that it did not have sufficient financial resources to finance the large amount of capital spending needed to undertake all of these initiatives without temporarily compromising its financial position, nor it did it have the management resources or the expertise to carry out all of these initiatives on its own. Accordingly, starting in December 2019, the company began conversations with a number of potential partner companies with which it could expect to generate synergies. These discussions covered a range of tie-up options that included capital and business alliances. Following those conversations, Demae-can decided to approach LINE Corp., the company’s leading shareholder and a company with which it had maintained a business alliance since FY03/16, to sound out LINE Corp.’s interest in forming even closer ties by establishing a more substantial capital and business alliance. Detailed discussions aimed at achieving these ends began in earnest in January 2020 and, after multiple rounds of meetings, the two sides reached a final agreement on the terms of a capital and business alliance, having agreed that the enterprise value of Demae-can could be best increased over the medium to long term if the two companies established specific plans to undertake major investments in Demae-can’s business that are aimed at firmly securing an industry-leading position for its delivery service platform. With regard to the new capital injections into Demae-can, in the interest of lightening the burden on LINE Corp., it was agreed that only part of the capital would come directly from LINE Corp. and the rest would come from Mirai Fund Limited Liability Partnership, an investment fund established to support the growth of LINE Corp. that is 90% owned by NAVER J.Hub Corp., a subsidiary of NAVER Corporation and LINE Corp.’s largest shareholder. More specifically, the purchase agreement calls for 20,548,000 of the new shares issued Demae-can to be placed with LINE Corp. and an equal number placed with Mirai Fund.

Outline of capital and business alliance between Demae-can and LINE Corp. Details of joint businesses between the two companies

▷ Optimizing use of database including information on users, member stores, and order histories at Demae-can

63/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

▷ Optimize use of tracking system at Demae-can ▷ Promoting transition to ONE ID (combining ID with LINE ID) at Demae-can ▷ Developing business intelligence (BI) tools to increase the visibility of key performance indicators, such as order numbers and active users ▷ Upgrading management tools (CMS tools) for store operators ▷ Creating a main customer interface that can be customized by individual users ▷ Promoting Demae-can’s Sharing Delivery service (contract delivery agent) ▷ Promoting takeout order services ▷ Optimizing marketing and branding strategies for websites, LINE, and apps ▷ Putting one-to-one marketing and PDCA management into practice

Major areas of agreement in business alliance

▷ The LINE Delima home delivery service operated by LINE Corp. will be rebranded under the Demae-can name. ▷ The Pockeo home delivery service operated by LINE Corp. is one of the businesses that Demae-can will take over from LINE Corp. and will be subsequently merged with Demae-can’s home delivery service operations. ▷ Under a separate agreement between the two companies, LINE Corp. will dispatch its own IT system and marketing managers to Demae-can.

Outline of share underwriting agreement Major areas of agreement As a prerequisite to finalizing the payment for new shares issued via a private placement, Demae-can, LINE Corp., and Mirai Fund must agree on a date by which all three parties will have held an extraordinary general meeting of shareholders to vote upon the proposed capital and business alliance.

At the extraordinary general meeting of shareholders held by Demae-can, LINE Corp. will be able to nominate two candidates for Demae-can’s Board of Directors (for internal director positions, including one candidate for the position of representative director).

Demae-can will make the necessary preparations for two members of its Board of Directors (Nahoko Wada and Leo Shigehiro) to step down from their positions on the board following the end of the extraordinary general meeting of shareholders.

Demae-can will also make the necessary preparations for directors currently serving in the capacities of internal auditor and external auditor (Tetsuya Tsuji), and whose terms in office were set to continue following the FY08/20 regular annual meeting of shareholders, to step down from their position on the board following the end of the same regular annual meeting of shareholders.

On the same day, the company announced its board of director candidates and proposed changes at the representative director level.

New candidates nominated for Demae-can’s board of directors Hideo Fujii (executive officer at LINE Corp., CEO at O2O Company) Shoji Fujiwara (Executive Chief Marketing Officer at O2O Company of Line Corp.)

Expected date of office assumption Once payment for the new shares issued by Demae-can via a private placement is received from LINE Corp. and Mirai Fund, the new candidates for Demae-can’s board of directors will be cleared to assume their respective positions on the board of directors

64/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

following the end of Demae-can’s extraordinary general meeting of shareholders scheduled to be held in June 2020 or later, assuming that they are approved by a majority vote of Demae-can shareholders.

Change at representative director level Reason for change In order to foster a closer working relationship with LINE Corp. over the course of the new capital and business alliance and strengthen its management structure, Demae-can is proposing a move to a structure employing two representative directors, with current Demae-can president and representative director Rie Nakamura assuming the position of chairman and representative director, and LINE Corp. executive officer Hideo Fujii coming in to serve as the new Demae-can president and representative director.

Expected date of office assumption Once payment for the newly issued shares is received from LINE Corp. and Mirai Fund, current Demae-can president and representative director Rie Nakamura is slated to assume a new position as Demae-can chairman and representative director, and LINE Corp. executive officer Hideo Fujii is slated to assume a new position as Demae-can president and representative director, pending approval at the extraordinary shareholders meeting and the subsequent adoption of a resolution by Demae-can’s Board of Directors.

On the same day, the company also announced that it would reacquire and cancel all remaining Series 11 warrants issued via private placement to Macquarie Bank Ltd. on May 9, 2019. In June 2019, Macquarie Bank exercised a single warrant and Demae- can issued 100 shares common stock. Because the company’s shares are currently running below minimum exercise price, the remaining warrants have not been exercised. The company expects to pay a total of roughly JPY18mn to buy back the warrants and plans reacquire and cancel the warrants on April 17, 2020.

65/67 Demae-can / 2484 RCoverage LAST UPDATE: 2021.03.01 Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

Profile

Company name Head office

Osaka: Midosuji Daiwa Building 8F 3-6-8 Kyutaromachi Chuo-ku Osaka, Japan 541-0056 Demae-can Co., Ltd. Tokyo: Link Square Shinjuku (general reception: 11F) 5-27-5 Sendagaya Shibuya-ku, Tokyo, Japan 151-0051 Phone Listed on +81-3-4500-9380 Tokyo Stock Exchange JASDAQ Market Established Exchange listing July 2010 (TSE JASDAQ) September 9, 1999 June 2006 (OSE Nippon New Market Hercules) Website Fiscal year end https://corporate.demae-can.com/index.html (Japanese only) — IR contact IR web

https://corporate.demae-can.com/en/contact.html https://corporate.demae-can.com/en/index.html

IR mail IR phone — +81-3-4500-9386

66/67 About Shared Research Inc. RCoverage Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

We offer corporate clients comprehensive report coverage, a service that allows them to better inform investors and other stakeholders by presenting a continuously updated third-party view of business fundamentals, independent of investment biases. Shared Research can be found on the web at https://sharedresearch.jp.

Current Client Coverage of Shared Research Inc.

Advance Create Co., Ltd. Digital Garage Inc. KFC Holdings Japan, Ltd. ROUND ONE Corporation ADJUVANT COSME JAPAN CO., LTD. Doshisha Corporation KI-Star Real Estate Co., Ltd. RYOHIN KEIKAKU CO., LTD. Aeon Delight Co., Ltd. Dream Incubator Inc. KLab Inc. SanBio Company Limited Aeon Fantasy Co., Ltd. Earth Corporation Kondotec Inc. SANIX INCORPORATED Ai Holdings Corporation Edion Corporation Kumiai Chemical Industry Co., Ltd. Sanrio Company, Ltd. AI inside Inc. Elecom Co., Ltd. Lasertec Corporation SATO HOLDINGS CORPORATION AirTrip Corp. en Japan Inc. Locondo, Inc. SBS Holdings, Inc. and factory, inc. Estore Corporation. LUCKLAND CO., LTD. Seikagaku Corporation ANEST IWATA Corporation euglena Co., Ltd. Marumae Co., Ltd. Seria Co.,Ltd. AnGes Inc. FaithNetwork Co., Ltd. MATSUI SECURITIES CO., LTD. Serverworks Co.,Ltd. Anicom Holdings, Inc. Ferrotec Holdings Corporation Media Do Co., Ltd. SHIFT Inc. A nritsu C orporation FIELDS CORPORATION Medical Sy stem Network C o., Ltd. Shikigaku Co., Ltd Apaman Co., Ltd. Financial Products Group Co., Ltd. MEDINET Co., Ltd. SHIP HEALTHCARE HOLDINGS, INC. ARATA CORPORATION First Brothers Col, Ltd. MedPeer,Inc. SIGMAXYZ Inc. Artspark Holdings Inc. FreeBit Co., Ltd. Mercuria Investment Co., Ltd. SMS Co., Ltd. AS ONE CORPORATION Gamecard-Joyco Holdings, Inc. Metaps Inc. Snow Peak, Inc. Ateam Inc. GameWith, Inc. Micronics Japan Co., Ltd. Solasia Pharma K.K. Aucfan Co., Ltd. GCA Corporation MIRAIT Holdings Corporation SOURCENEXT Corporation AVANT CORPORATION Good Com Asset Co., Ltd. Monex Goup Inc. Star Mica Holdings Co., Ltd. A xell Corporation Grandy House Corporation MORINAGA MILK INDUSTRY CO., LTD. Strike Co., Ltd. A zbil Corporation Hakuto Co., Ltd. Mortgage Service Japan Limited. SymBio Pharmaceuticals Limited AZIA CO., LTD. Hamee Corp. MRT Inc. Synchro Food Co., Ltd. AZoom, Co., Ltd. Happinet Corporation NAGASE & CO., LTD TAIYO HOLDINGS CO., LTD. Base C o., Ltd Harmonic Driv e Sy stems Inc. NAIGAI TRANS LINE LTD. Takashimaya Company, Limited BEENOS Inc. HENNGE K.K. NanoCarrier Co., Ltd. Take and Giv e Needs Co., Ltd. Bell-Park Co., Ltd. Hosok awa Micron Corporation Net Marketing C o., Ltd. TEAR Corporation Benefit One Inc. Hope, Inc. Net One Sy stems C o.,Ltd. Tenpo Innovation Inc. B-lot C o.,Ltd. HO USEDO C o., Ltd. Nichi-Iko Pharmaceutical Co., Ltd. 3-D Matrix, Ltd. Broadleaf Co., Ltd. H2O Retailing Corporation Nihon Denkei Co., Ltd. The Hokkoku Bank,Ltd. CanBas Co., Ltd. IDOM Inc. Nippon Koei Co., Ltd. TKC Corporation Canon Marketing Japan Inc. IGNIS LTD. NIPPON PARKING DEVELOPMENT C o., Ltd. TKP C orporation Career Design Center Co., Ltd. i-mobile Co.,Ltd. NIPRO CORPORATION Tsuzuki Denki Co., Ltd. Carna Biosciences, Inc. Inabata & Co., Ltd. Nisshinbo Holdings Inc. TOCALO Co., Ltd. CARTA HOLDINGS, INC Infocom Corporation NS TOOL CO., LTD. TOKAI Holdings Corporation CERES INC. Infomart Corporation OLBA HEALTHCARE HOLDINGS,Inc. Tokyu Construction Co., Ltd. C hiyoda C o., Ltd. Intelligent W av e, Inc. OHIZUMI MFG. CO., LTD. TOYOBO CO., LTD. C hori C o., Ltd. ipet Insurance C O., Ltd. Oisix ra daichi Inc. Toy o Ink SC Holdings C o., Ltd Chugoku Marine Paints, Ltd. Itochu Enex Co., Ltd. Oki Electric Industry Co., Ltd Toyo Tanso Co., Ltd. cocokara fine Inc. JAFCO Co.,Ltd. ONO SOKKI Co., Ltd. Tri-Stage Inc. COMSYS Holdings Corporation JMDC Inc. ONWARD HOLDINGS CO.,LTD. TSURUHA Holdings COTA CO.,LTD. JSB Co., Ltd. Pan Pacific International Holdings Corporation VISION INC. CRE, Inc. JTEC Corporation PARIS MIKI HOLDINGS Inc. VISIONARY HOLDINGS CO., LTD. C REEK & RIVER C o., Ltd. J Trust Co., Ltd PIGEON CORPORA TION World Holdings Co., Ltd. Daiichi Kigenso Kagak u Kogyo Co., Ltd. Japan Best Rescue System Co., Ltd. P3, inc. YELLOW HAT LTD. Daiseki Co., Ltd. JINS HOLDINGS Inc. QB Net Holdings Co., Ltd. YOSHINOYA HOLDINGS CO., LTD. Demae-Can CO., LTD JP-HOLDINGS, INC. RACCOON HOLDINGS, Inc. YUMESHIN HOLDINGS CO., LTD. DIC Corporation KAMEDA SEIKA CO., LTD. Raysum Co., Ltd. ZAPPALLAS, INC. Digital Arts Inc. Kanamic Network Co.,LTD RESORTTRUST, INC. Attention: If you would like to see companies you invest in on this list, ask them to become our client, or sponsor a report yourself.

Disclaimer: This document is provided for informational purposes only. No investment opinion or advice is provided, intended, or solicited. Shared Research Inc. offers no warranty, either expressed or implied, regarding the veracity of data or interpretations of data included in this report. We shall not be held responsible for any damage caused by the use of this report. The copyright of this report and the rights regarding the creation and exploitation of the derivative work of this and other Shared Research Reports belong to Shared Research. This report may be reproduced or modified for personal use; distribution, transfer, or other uses of this report are strictly prohibited and a violation of the copyright of this report. Our officers and employees may currently, or in the future, have a position in securities of the companies mentioned in this report, which may affect this report’s objectivity.

Japanese Financial Instruments and Exchange Law (FIEL) Disclaimer: The report has been prepared by Shared Research under a contract with the company described in this report (“the company”). Opinions and views presented are ours where so stated. Such opinions and views attributed to the company are interpretations made by Shared Research. We represent that if this report is deemed to include an opinion from us that could influence investment decisions in the company, such an opinion may be in exchange for consideration or promise of consideration from the company to Shared Research.

Contact Details Shared Research Inc. 3-31-12 Sendagi Bunkyo-ku Tokyo, Japan https://sharedresearch.jp Phone: +81 (0)3 5834-8787 Email: [email protected]

67/67