Slide 1: Financial Results, Fiscal year ending Feb. 2025
Fiscal year ending Feb. 2025 (February 21, 2024 - February 20, 2025) Financial Results Heiwado Co., Ltd. (Securities Code 8276) Note : This document has been translated from the Japanese original for reference purposes only. In the event of any Financial Results Briefing discrepancy between this tra
Slide 2: Financial Summary
Financial Summary ◆Consolidated results ◆Non-Consolidated results Operating revenue Increase Operating revenue Increase Operating profit Increase Operating profit Decrease Ordinary profit Increase Ordinary profit Decrease Profit attributable to owners of the parent Increase Profit Increase [Unit：Mil
Slide 3: Operating Revenue
Operating Revenue ⚫ Both non-consolidated and consolidated subsidiaries saw revenue increases. Bestone and National Maintenance showed significant growth. ⚫ Non-consolidated operating revenue increased by 106.0% YoY, driven by a 103.7% increase in existing store sales, a +4,975 million yen contribut
Slide 4: Non-Consolidated Existing Store Sales Growth of 103.7%: Detailed Components
Non-Consolidated Existing Store Sales Growth of 103.7%: Detailed Components ⚫ Growth in food customer traffic, driven in part by enhanced strategies for the 30-40 demographic (leap year impact approximately 0.2%). ⚫ The average customer spend showed a marginal increase, with rising average item pric
Slide 5: Operating Profit by Major Group Companies
Operating Profit by Major Group Companies ⚫ The profit increase for Bestone and National Maintenance was driven by expanded transactions with Heiwado. ⚫ Five Star‘s profit decline was due to higher personnel expenses resulting from wage increases. [Unit：Millions of yen,％] FYE 2/2024 FYE 2/2025 Resul
Slide 6: YoY Change in Non-Consolidated Operating Profit
YoY Change in Non-Consolidated Operating Profit ⚫ Selling, general and administrative expenses were in line with initial forecasts. The primary factor behind the decline in operating profit was insufficient gross profit. ⚫ Other expenses increased due to higher repair costs and sales commissions. [U
Slide 7: Non-Consolidated Gross Profit Margin by Department
Non-Consolidated Gross Profit Margin by Department ⚫ Strategic pricing of high-turnover items, implemented to boost customer traffic among the 30-40 demographic, resulted in a lower markup rate. ⚫ The standalone markup rate for fresh food declined due to higher supply volumes from Bestone, which neg
Slide 8: Non-Consolidated Profit Breakdown
Non-Consolidated Profit Breakdown ⚫ Although ordinary profit increased by +229 million yen YoY due to higher dividend income from Heiwado (China), it decreased overall due to the significant impact of lower operating profit. ⚫ Non-consolidated profit increased due to extraordinary gains (sale of str
Slide 9: Progress of the Fifth Medium-Term Management Plan
Progress of the Fifth Medium-Term Management Plan 8 ©2024 HEIWADO CO.,LTD. All rights reserved
Slide 10: Heiwado Group's Mid- to Long-Term Vision
Heiwado Group’s Mid- to Long-Term Vision Heiwado Group, operating as essential regional infrastructure, is dedicated to Heiwado addressing social challenges in collaboration with local communities, Group’s encompassing all aspects of daily living. We are committed to fostering a Purpose "dynamic reg
Slide 11: Fifth Medium-Term Management Plan
Fifth Medium-Term Management Plan Three key strategies to strengthen the Group's core retail business. • Optimizing pricing for frequent purchases to enhance competitiveness. ① Building customer allegiance • Differentiating with fresh food and private-brand products. by effectively meeting • Strengt
Slide 12: Building customer allegiance by effectively meeting parenting generation needs
Building customer allegiance by effectively meeting parenting generation needs. Competitive pricing for high-frequency goods, expanded selection of bulk merchandise, store renovation and high-demand tenant recruitment, and dedicated in-store event management. PB products Large-size products ＆ KVI (K
Slide 13: Building customer allegiance: HOP app and One-to-One marketing
Building customer allegiance by effectively meeting parenting generation needs. Our proprietary mobile app, the HOP app, was launched We will strengthen our One-to-One marketing approach in July 2024, and we are enhancing functionality by and promote data-driven management. adding bank account reple
Slide 14: Expansion of HOP economic zone based on dominant strategy
Expansion of HOP economic zone based on dominant strategy Area expansion and dominant market development/penetration driven by new store rollout. ◆Nisshin Kaguyama ◆Friendmart Ibaraki Hirata ◆Friendmart Nagahama Gion （Nisshin, Aichi Pref.） （ Ibaraki, Osaka Pref. ） （ Nagahama, Shiga Pref. ） Open Apr.
Slide 15: Expansion of HOP economic zone: store renovation in Shiga
Expansion of HOP economic zone based on dominant strategy Developing stores designed to attract more customers and compete effectively with rivals in Shiga, while strengthening the customer base. Renovation AL PLAZA Kusatsu（April 2023) Store revitalization through scrap and build ・Full-building reno
Slide 16: Expansion of HOP economic zone: community engagement services
Expansion of HOP economic zone based on dominant strategy Enhance engagement with local communities and customers to adapt to changing needs 【Home Support Service】 Vibrant and thriving community ・100% Population Coverage in Shiga Pref. ・Expansion to 3 stores in Fukui Pref. (Population Coverage: 31.5
Slide 17: Community revitalization and local challenges
Expansion of HOP economic zone based on dominant strategy We promote community revitalization and tackle local challenges through our business. ■Dementia Supporter Training Initiatives ■Contribution of donations to the 2024 Noto Peninsula Fostering a culture of 'hospitality' and 'mutual support' by
Slide 18: Reinforcing customer base loyalty through community outreach
Expansion of HOP economic zone based on dominant strategy Reinforcing customer base loyalty through localized community outreach ■Partnering with the 2025 Japan Games and National ■Collaboration with local banks for regional Sports Festival for People with a Disability hosted by revitalization Shiga
Slide 19: Driving cost structure reform to enhance productivity
Driving cost structure reform to enhance productivity Actions to anticipate and mitigate the impact of workforce reductions and increasing labor expenses have been pursued consistently since FYE 2/2018. Utilizing Processing and Delicatessen Centers [Unit：％] BESTONE Operating revenue 125 Productivity
Slide 20: Logistics cost structure optimization
Driving cost structure reform to enhance productivity Drove logistics cost structure optimization in response to the operational challenges of the 2024 logistics Crisis. 【Inter-company collaborative logistics】 【Improved Logistics Efficiency by Extending Processed Food Order Lead Times】 (ⅱ) Transport
Slide 21: Plan for the FYE 2/2026
Plan for the FYE 2/2026 20 ©2025 HEIWADO CO.,LTD. All rights reserved
Slide 22: Consolidated Capital Expenditure Plan for the FYE 2/2026
Consolidated Capital Expenditure Plan for the FYE 2/2026 ⚫ New stores: 1 store in H1, 3 stores in H2 ⚫ To mitigate the operational disruptions caused by recent cyber threats, we are allocating more IT resources to 'Network Security.' We will further drive the implementation of the 'Information Aggre
Slide 23: Consolidated Capital Expenditure Plan: new stores and renovations
Consolidated Capital Expenditure Plan for the FYE 2/2026 ⚫ New store CAPEX: ¥5,297 million (¥2,493 million of which is designated for new stores opening in FYE 2/2026+) ◆Friendmart Yokaichi Myohoji ◆ Friendmart Katata (Tentative) (Higashiomi, Shiga Pref.） (Otsu, Shiga Pref.） Open April 18, 2025 Tota
Slide 24: Forecast for the FYE 2/2026
Forecast for the FYE 2/2026 ⚫ We anticipate profit growth in the Non-consolidated segment as a result of 'Sales Growth Initiatives' and 'Productivity Improvement' measures under the 5th Mid-Term Management Plan. Based on FYE 2/2025 performance challenges, we are forecasting increased operating profi
Slide 25: Quantitative Targets for 2030
Quantitative Targets for 2030 Quantitative Targets for 2030 Operating Revenue 500 billion yen or more (consolidated) Operating Profit Margin 4.5% or more (consolidated) ROE 8% Percentage of Women in 20% or more Management CO2 Emissions 46% reduction (Scope 1 and 2) (compared to FYE 2/2014) 50% reduc
Slide 26: Action to Implement Management Conscious of Cost of Capital and Stock Price (Update)
Action to Implement Management that is Conscious of Cost of Capital and Stock Price(Update) 25 ©2025 HEIWADO CO.,LTD. All rights reserved
Slide 27: Key update
Key update ⚫ Tokyo Stock Exchange, Inc.(TSE) has Published “Cases Where Companies Are Not Aligned With Investors’ Perspectives” etc. in regard to management that is conscious of cost of capital and stock price on November 21, 2024 ⚫ Based on the TSE’s reports, we have revised our “Action to Implemen
Slide 28: Analysis and evaluation of current situation
Analysis and evaluation of current situation ⚫ Given that our Price-to-Book Ratio (PBR) has remained below 1x for an extended period, we are committed to further enhancing our corporate value to realize management that is conscious of capital costs and stock prices. ⚫ While our current cost of equit
Slide 29: Current Assessment
Current Assessment ⚫ Factors contributing to low PBR Fundamental earnings ROE has consistently underperformed the cost Net Profit Ratio（％） ROE（％） of capital improvement is an urgent priority 8.0％ decomposition. 2.4 2.4 2.2 6.0 6.2 2.0 5.6 5.7 1.8 1.6 4.5％ 1.4 4.2 3.9 3.7 2/2019 2/2020 2/2021 2/2022
Slide 30: Policy and Targets
Policy and Targets ⚫ In our medium-term management plan, we will enhance sales capabilities and improve productivity, aiming to achieve an operating profit margin of 4.5% or higher and an ROE of 8% by 2030. ⚫ We will aim to strengthen shareholder returns and improve capital efficiency through share
Slide 31: Challenges and Responses: ROE
Challenges and Responses ⚫ We aim to achieve an 8.0% ROE through enhanced profitability and strategic capital allocation Net Profit Total Assets Financial Ratio Turnover Leverage 1.4~2.4⇒3.2～ 1.4~1.5⇒1.4 1.7~1.9⇒1.8 ＝ ＝ ＝ Net profit↑↑ Net sales↑ Total assets↓ ROE • Enhancing sales • Enhancing sales
Slide 32: Review of executive compensation system
Review of executive compensation system ⚫ Performance-Based Restricted Stock Unit Plan (Implemented in May 2024) • To clarify the link between the compensation of eligible directors and both the company's financial performance and our stock value. Objectives of Implementation • To provide eligible d
Slide 33: Engagement with investors
Engagement with investors ⚫ The content of the dialogues with investors is fed back to the Board of Directors. ⚫ We indicated our wish to be contacted by institutional investors to enhance communication. ⚫ We plan to explore increasing the number of briefings for individual investors for the FYE 2/2
Slide 34: Medium-term cash allocation (FYE 2/2025-FYE 2/2027)
Medium-term cash allocation (FYE 2/2025-FYE 2/2027 ) FYE 2/2024 FYE 2/2025 Funding Use Funding Use Highlights: FYE 2/2025 Debt ① Dividend increase Increase ② Share Buybacks 5 ICF ③ Reduction of Interest-Bearing Debt OCF ④ We optimized our cash and cash ICF Shareholder OCF 146 Returns equivalents hol
Slide 35: Shareholder Return Policy
Shareholder Return Policy FYE 2/2021 FYE 2/2022 FYE 2/2023 FYE 2/2024 FYE 2/2025 FYE 2/2026 Net profit (Millions of yen) 9,724 10,647 7,516 6,774 10,727 10,800 Dividend per share (yen) 38 42 42 42 63 66 Dividend payout ratio (%) 20.5 20.7 29.3 32.5 30.1 30.4 ⚫ For the FYE 2/2025, the interim dividen
Slide 36: Supplementary Materials (Consolidated)
Supplementary Materials (Consolidated) 35 ©2025 HEIWADO CO.,LTD. All rights reserved
Slide 37: Consolidated Operating Results Quarterly Changes for the FYE 2/2025
Consolidated Operating Results Quarterly Changes for the FYE 2/2025 ⚫ Q1, Strategic price setting was successful in increasing the number of customers, resulting in an increase in sales. The leap year effect also boosted sales by about 1%. ⚫ Q2, Overall sales were relatively firm. On a non-consolida
Slide 38: Consolidated Results by Major Company Operating Revenue
Consolidated Results by Major Company Operating Revenue ⚫ Decrease in Heiwado (China) and Direct Shop sales was due to withdrawal and downsizing from unprofitable businesses. [Unit：Millions of yen,％] FYE 2/2024 FYE 2/2025 Results Results YoY Change Heiwado Co.,Ltd 380,967 403,686 106.0 22,718 Total
Slide 39: Operating Revenue Increase/Decrease Factors
Consolidated Results by Major Company Operating Revenue Increase/Decrease Factors ⚫ Heiwado (China) closed its Zhuzhou store in the previous fiscal year. ⚫ Direct Shop scales back rental business [Unit：Millions of yen] FYE 2/2025 Results Change Increase/Decrease Factors Total consolidated subsidiary
Slide 40: Consolidated Results by Major Company Ordinary profit
Consolidated Results by Major Company Ordinary profit ⚫ The increase in profit from Bestone and National Maintenance is due to increased transactions with Heiwado ⚫ Five Star profit decrease due to higher labor costs resulting from wage increase . [Unit：Millions of yen,％] FYE 2/2024 FYE 2/2025 Resul
Slide 41: Ordinary profit Increase/Decrease Factors
Consolidated Results by Major Company Ordinary profit Increase/Decrease Factors ⚫ Bestone and National Maintenance saw an increase in orders from Heiwado. ⚫ Five Star increased labor costs due to wage hikes and one-time expenses related to new business [Unit：Millions of yen] FYE 2/2025 Results Chang
Slide 42: Consolidated FYE 2/2025 Selling, general and administrative expenses
Consolidated FYE 2/2025 Selling, general and administrative expenses ⚫ Personnel expenses (Heiwado) increased by 1,469 million yen due to new stores. Subsidiaries increased labor costs due to wage increases. ⚫ Utilities expenses increased due to higher electricity costs resulting from higher unit pr
Slide 43: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows 60,000 [Unit：Millions of yen] 50,000 40,000 30,000 ＋22,973 (14,646) (6,544) Profit before income taxes Capital investment- ＋15,218 related 20,000 Non-financial profit and loss (16,221) (15,167) ＋14,317 Other Interest-bearing debt- Increase (decrease) in trade ＋1
Slide 44: Consolidated Key Financial Indicators
Consolidated Key Financial Indicators ⚫ Ratio of operating profit to operating revenue worsened slightly from the previous year, as profits did not increase as much as operating revenue increased. ⚫ Net return on equity ratio increased per share indicators due to the impact of share buybacks and the
Slide 45: Supplementary Materials (Non-consolidated)
Supplementary Materials (Non-consolidated) 44 ©2025 HEIWADO CO.,LTD. All rights reserved
Slide 46: Non-Consolidated Financial Results Quarterly Changes for the FYE 2/2025
Non-Consolidated Financial Results Quarterly Changes for the FYE 2/2025 ⚫ Q1, strategic price setting was effective and increased the number of customers, resulting in an increase in sales. In addition, the leap year effect boosted sales by about 1% ⚫ Q2, although overall sales were relatively firm,
Slide 47: Non-Consolidated Net Sales by Department
Non-Consolidated Net Sales by Department ⚫ Sales were boosted by about 0.2% due to the leap year ⚫ Increase in the number of customers due to the effect of strategic pricing for food products, and increase in the unit price per item due to high market prices for fruits and vegetables and price incre
Slide 48: Non-Consolidated Selling, general and administrative expenses
Non-Consolidated FYE 2/2025 Selling, general and administrative expenses ⚫ +2,055 million yen due to 5 new stores in the current period, +738 million yen due to incorporation of 6 Maruzen stores ⚫ Shipping costs increased with handling volume due to increased sales, and at the same time, operating r
Slide 49: Non-consolidated Net sales Factors for change
Non-consolidated Net sales Factors for change ⚫ New stores” were 2 in the previous fiscal year, 5 in the current fiscal year, and 6 stores incorporated into Maruzen. ⚫ Closed” were Friendmart Nango store, Friendmart Yawata Ichinotsubo store, and Friendmart Kishibe store. 380,000 new store [Unit：Mill
Slide 50: Existing stores' customer counts and average spend per customer
Non-Consolidated Existing stores‘ customer counts and average spend per customer YOY ⚫ Although price hikes continued and the prices of rice and fruits and vegetables soared, average price per item growth slowed from the previous year. ⚫ Number of customers increased 102.8% due to strategic pricing
Slide 51: Non-Consolidated Net Sales by Region Existing Stores YOY
Non-Consolidated Net Sales by Region Existing Stores YOY ⚫ Leap year effect pushed up about 0.2% in each region ⚫ Shiga increased significantly in areas where competitors' stores closed, boosting overall sales. ⚫ In Hyogo, growth was higher due to the closure of a competitor store. ⚫ In Hokuriku, gr
Slide 52: Supplementary Materials (earnings forecast)
Supplementary Materials (earnings forecast) 51 ©2025 HEIWADO CO.,LTD. All rights reserved
Slide 53: Non-Consolidated Existing stores Sales target YOY
Non-Consolidated Existing stores Sales target YOY ⚫ High sales growth is expected due to the progress of the 5th Mid-Term Management Plan. ⚫ Yell Corporation will be merged into a single entity as of August 21, 2025, but will not be treated as an existing store ⚫ Existing stores boosted by planned r
Slide 54: Forecast for the first half of the FYE 2/2026
Forecast for the first half of the FYE 2/2026 ⚫ Friendmart Yokaichi Myohoji Store (Shiga) scheduled to open on 18 April, and remodeling of five existing stores. ⚫ Electricity costs are budgeted based on the assumption that they will remain at the same level as at the time of the financial results br
Slide 55: Non-Consolidated March 2025 Net Sales by Department
Non-Consolidated March 2025 Net Sales by Department ⚫ Store statistics: Pre-existing stores: 99.3% No of customers, 103.2% Average spend per customer, 98.3% Number of items purchased per capita, 104.9% Average price per item ⚫ Existing stores increased 102.5% over the previous year, despite the nega
Slide 56: Notes.
Notes. • This material is provided for informational purposes only and is not intended as a solicitation to take any action. This material (including performance plans) has been prepared by the Company based on reliable information currently available, but it contains risks and uncertainties. The Co