
Financial Results Presentation for FY2020 (Fiscal Year Ended April 30, 2021) June 2021 ITO EN, LTD. Copyright (C) All Rights Reserved. ITO EN, LTD. INDEX Soft Drink Market in Japan/ About achievements …P.3 Effects of COVID-19 Forecasts for FY 2021 …P.8 Application of revenue recognition standard Marketing & Management strategy …P.12 Appendix …P.26 Copyright (C) All Rights Reserved. ITO EN, LTD. 2 Soft Drink Market in Japan/ About achievements Copyright (C) All Rights Reserved. ITO EN, LTD. 3 Soft Drink Market in Japan Soft Drink Market Trends Coffee has become popular Tea has become Popular (¥ billion) Results 2020 year YoY -9% 4,000 Create a Unsweetened RTD Tea Market (¥ billion) 202.0 200.0 4,000 3,759.0 Others - % 187.0 Others 16 3,500 218.4 166.0 154.0 3,425.0 221.9 140.0 178.0 Vegetable + 2 % 159.2 235.0 226.5 178.0 145.6 244.0 157.0 Vegetable 157.0 3,000 Sports Drink - % 1980 1985 276.3 15 3,000 Pioneering of Pioneering of 260.1 295.0 280.0 199.0 Canned Canned 305.0 193.0 Sports Drink Mineral Water - 10 % Oolong Tea Green Tea 221.0 376.4 289.0 284.0 224.0 447.4 2,000 Carbonated + 0 % 934.0 267.0 259.0 Fruit 2,500 157.5 256.0 Coffee 97.7 - 12 % 740.0 733.0 Mineral Water 1,000 Tea total 720.0 - 9 % 538.5 745.0 2,000 648.9 735.0 of which Green tea - 6 % Carbonated 718.2 0 of which Other tea - 12 % 2019 2020 1,500 955.1 933.0 915.0 720.3 942.0 835.0 Coffee 922.3 805.0 Forecast 2021 year YoY +2% 843.5 1,000 (¥ billion) (931.3) (945.0) (966.5) (873.0) (877.0) (901.0) 4,000 Others - 1 % 699.3 (796.4) 484.3 500.0 521.5 (Tea total) 3,495.0 659.0 458.0 459.0 466.0 Other Tea 3,425.0 Vegetable + % 500 597.2 (604.4) 579.3 0 519.2 3,000 Sports Drink + 3 % 330.0 447.0 415.0 445.0 445.0 418.0 435.0 Green Tea 172.0 217.1 Mineral Water + % 0 85.2 1 2,000 Carbonated + 1 % Trends in sugar-free beverage market 52% 45% 49% Coffee + 4 % 50% 38% 31% 25% 53% 1,000 Tea total + 3 % 25% 12% of which Green tea 1% 2% More than half of all domestic beverages are sugar-free. + 4 % 0% 0 of which Other tea + 2 % 2021 (¥ billion) 1980 1985 1990 1995 2000 2005 2015 2018 2019 2020 2020 2021 Est. Est. Total - - 2,708 3,100 3,540 3,613 3,678 3,805 3,759 3,425 3,495 Source: ITO EN Sales of beverages that emphasize health value were strong. The trend is expected to remain the same during 2021. Copyright (C) All Rights Reserved. ITO EN, LTD. 4 Soft Drink Market in Japan and ITO EN Monthly Sales Volume Trends Beverage business of ITO EN (non-consolidated) (Unit: million yen) (%) FY 2020 21 ITO EN FY 2020 20 Sales YoY %Change 10 1 17 Results Composition -4 -1 0 -7 -7 -6 -6 -12 -11 -13 100.0 % - % -10 -2 -3 Drinks 313,777 7.5 -22 -7 -7 -5 -7 -7 -20 -12 -12 Market -16 Tea total 201,133 64.1 % - 7.8 % -30 -27 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Source: ITO EN, (Chart) May 2020 to Apr 2021 Japanese Tea/Healthy Tea 182,681 58.2 % - 5.5 % Chinese Tea 4.7 % - % (%) FY 2019 Market 14,611 15.1 10 3 4 3 2 3 2 1 % - % -3 Black Tea 3,841 1.2 50.0 0 -4 -4 4 -1 2 Vegetable 43,622 13.9 % - 0.8 % -10 -3 -2 -4 -3 -3 -7 -19 -5 -23 -20 ITO EN Coffee 34,486 11.0 % - 5.6 % -21 -23 -30 % - % May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Mineral Water 7,752 2.5 17.5 Source: ITO EN, (Chart) May 2019 to Apr 2020 Carbonated 9,916 3.2 % - 11.3 % News Related to Soft Drink Market Others 16,868 5.4 % - 16.4 % 2020 May Declaration of a State of Emergency Jul Record amount of rainfall and long rainy season Ratio of sugar-free beverages: 75 % 2021 Jan Restriction on New Year's events such as shrine ITO EN Product Development Concept: visits Declaration of a State of Emergency (2nd time) “Natural, Healthy, Safe, Well-designed, Delicious” Apr Declaration of a State of Emergency(3rd time) *Conventional standard Source: ITO EN Copyright (C) All Rights Reserved. ITO EN, LTD. 5 Financial Results for FY2020 Full year(May 2020 to Apr 2021) (Unit: million yen, thousand dollars) FY 2019 FY 2020 Upper: Net Sales FY 2019 FY 2020 Results Sales Results Sales YoY % Bottom: Operating Income Results Results YoY % Composition Composition Change Change Net Sales 483,360 100.0% 446,281 100.0% -7.7% Domestic 102,885 91,732 -10.8% Subsidiaries 3,196 13 -99.6% Gross Profit 232,755 48.2% 215,003 48.2% -7.6% Tully's Coffee 32,811 26,215 -20.1% Sales Commission 80,537 16.7% 74,313 16.7% -7.7% Japan Co., Ltd. 1,725 - 1,374 - Advertising 11,206 2.3% 9,808 2.2% -12.5% Chichiyasu 14,251 13,897 -2.5% Freight 14,651 3.0% 13,833 3.1% -5.6% Company 410 702 71.4% Depreciation and 10,957 2.3% 10,207 2.3% -6.8% -2.5% Amortization Overseas 36,282 35,355 Selling, General and Subsidiaries Consolidated 44.0% 44.4% -6.8% 1,617 1,864 15.3% Administrative Expenses 212,814 198,327 30,971 30,068 -2.9% Operating Income 19,940 4.1% 16,675 3.7% -16.4% US 654 717 9.7% Ordinary Income 19,432 4.0% 17,029 3.8% -12.4% Business $ 285,736 $ 283,135 -0.9% Extraordinary Losses Performances of Subsidiaries - - - and Income -5,064 -3,634 $ 6,034 $ 6,758 12.0% Net Income 7,793 1.6% 7,011 1.6% -10.0% Other Overseas 5,311 5,286 -0.5% 0.0% 0.0% 0.0% 0.0% 0.0% Subsidiaries 963 1,146 19.1% FY 2019 FY 2020 Results Sales Results Sales YoY % - 33,595 - 33,538 - Composition Composition Change Elimination of Internal Transactions Net Sales 377,787 100.0% 352,732 100.0% -6.6% - 1,500 - 962 - Exchange rate (US$) 108.39 106.20 Gross Profit 180,977 47.9% 169,621 48.1% -6.3% (average during a year) Operating Income 16,626 4.4% 15,759 4.5% -5.2% Non-Consolidated Ordinary Income 18,142 4.8% 17,565 5.0% -3.2% Copyright (C) All Rights Reserved. ITO EN, LTD. 6 Effects of COVID-19 1Q 2Q 3Q 4Q Main impact on sales *4Q ( Feb to Apr, 2021 ) Establishing a home-based work style (non-consolidated) ITO EN - Decrease in visits to convenience stores particularly in urban areas ( Feb to Apr, 2021 ) - The impact of vending machine sales is even more pronounced due to Self-quarantine +1.7 % - Growing interest in leaf (tea bags) and other products for home use as home demand Nationwide re-expansion of the number of cases (severe cases) - The Government announced “Stricter COVID-19 measures” and “Declaration of a State Reference: Feb to Apr, 2020 -8.5 % of Emergency” *Stricter COVID-19 measures: from Apr 20, 2021 *Declaration of a State of Emergency: from Jan 7 to Mar 21, and from Apr 25, 2021 Tully's Coffee Japan ( Feb to Apr, 2021 ) Strengths in store locations such as urban areas and around +22 % transportation, on the other hand, significant impact of closed or shortened business hours due to declared emergency in the area Reference: Feb to Apr, 2020 -34 % Targeted Prefectures at the end of Apr 2021 April Declaration of a State of Emergency : 4 prefectures Sales results YoY February March of last year April Stricter COVID-19 measures : 7 prefectures Sales - 25% + 13% - 75% + 212% Ratio of shops that suspended operations* 1% 1% 76% 11% Targeted Prefectures Ratio of shops that shortened business hours* 24% 22% 21% 35% *at the end of the month at the end of Apr 2020 Declaration of a State of Emergency All prefectures Copyright (C) All Rights Reserved. ITO EN, LTD. 7 Forecasts for FY 2021 Copyright (C) All Rights Reserved. ITO EN, LTD. 8 Forecasts for FY 2021 (Unit: million yen, thousand dollars) FY 2020 FY 2021 Upper: Net Sales FY 2020 FY 2021 Results Sales Forecast Sales YoY % Bottom: Operating Income Results Forecast YoY % Composition Composition Change Change Net Sales 446,281 100.0% 472,300 100.0% 5.8% Domestic 91,732 98,918 7.8% Subsidiaries 13 2,501 18287.8% Gross Profit 215,003 48.2% 228,400 48.4% 6.2% Tully's Coffee 26,215 31,500 20.2% Sales Commission 74,313 16.7% 77,894 16.5% 4.8% Japan Co., Ltd. - 1,374 1,000 - Advertising 9,808 2.2% 11,079 2.3% 13.0% Chichiyasu 13,897 13,610 -2.1% Freight 13,833 3.1% 14,101 3.0% 1.9% Company 702 680 -3.2% Depreciation and 10,207 2.3% 9,608 2.0% -5.9% 6.5% Amortization Overseas 35,355 37,643 Selling, General and Subsidiaries Consolidated 44.4% 44.1% 5.1% 1,864 2,285 22.5% Administrative Expenses 198,327 208,400 30,068 32,204 7.1% Operating Income 16,675 3.7% 20,000 4.2% 19.9% US 717 1,124 56.6% Ordinary Income 17,029 3.8% 19,800 4.2% 16.3% Business $ 283,135 $ 298,191 5.3% Extraordinary Losses Performances of Subsidiaries - - - and Income -3,634 -1,300 $ 6,758 $ 10,410 54.0% Net Income 7,011 1.6% 12,800 2.7% 82.5% Other Overseas 5,286 5,439 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% Subsidiaries 1,146 1,161 1.2% FY 2020 FY 2021 Results Sales Forecast Sales YoY % - 33,538 - 34,261 - Composition Composition Change Elimination of Internal Transactions Net Sales 352,732 100.0% 370,000 100.0% 4.9% - 962 - 1,786 - Exchange rate (US$) 106.20 108.00 Gross Profit 169,621 48.1% 178,400 48.2% 5.2% (average during a year) Operating Income 15,759 4.5% 17,000 4.6% 7.9% *Conventional standard Non-Consolidated Ordinary Income 17,565 5.0% 17,600 4.8% 0.2% Copyright (C) All Rights Reserved.
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