To Our Shareholders

Trends in the Food Service Industry

　In the food service industry, top-line performance has recovered due to rising inbound demand and price revisions at many restaurants. However, costpressures continue to mount due to soaring prices for agricultural and livestock products such as rice, vegetables, and meat, as well as chronic labor shortages. In addition,
consumers are becoming even more selective and thrifty in their spending. As a result, it is necessary to enhance added value while promoting efficient operations.
Under these circumstances, our Group is promoting the creation of brands that are chosen by consumers, while working to further enhance our corporate value.

As part of our efforts to improve efficiency

As part of our efforts to improve efficiency, we are standardizing raw materials across brands and advancing product development at the MD R&D Institute. Additionally, for Steak MIYA's hamburger steaks, we have shifted all shaping processes to group factories to reduce operational burdens at stores. Additionally, for the newly acquired dessert business operated by N Baton Company Ltd. (formerly Nihon Meika Souhonpo Co., Ltd., renamed on October 1, 2024) and the five consolidated subsidiaries engaged in the catering service business, we have not only streamlined procurement and logistics processes that were previously fragmented by leveraging group synergies but also implemented product production at group factories to further enhance efficiency.

Sales Strategies

　In terms of product-related initiatives, we are strengthening our partnership with our investee, agricultural production corporation Vegefru Farm Co., Ltd., and have switched to a high-quality salad bar featuring domestically produced vegetables at Steak MIYA, while also beginning to offer functional vegetables at Shabu Shabu On-Yasai. Kappa Sushi has been offering “Kappa Sushi's All-You-Can-Eat,” the first all-you-can-eat sushi buffet in the conveyor belt sushi chain industry, since 2017. We are now expanding this service to 200 stores, nearly 70% of all Kappa Sushi locations, for a limited time to offer customers a new dining experience.
At Gyu-Kaku, we offer not only all-you-can-eat options but also à la carte selections, including popular dishes served on large platters for a visually appealing dining experience.
For sales promotion and PR, we continue to air TV commercials featuring popular celebrities as brand ambassadors for Gyu-Kaku, On-Yasai, Kappa Sushi, and Steak MIYA to enhance brand and product appeal. Additionally, at OOTOYA, we launched a limited-time menu developed in collaboration with culinary expert “Dareuma-san”, which was well-received nationwide.

Sustainability Initiatives

　With regard to sustainability initiatives, we have been evaluated by CDP, an international non-profit organization that operates an environmental information disclosure system, as having recognized climate change-related risks and impacts and implemented specific actions in the “Climate Change” category of its 2024 survey, receiving a B score. We will continue to strive to achieve an A score for the implementation of best practices. Additionally, in the “Health Management Excellence Certification Program” jointly implemented by the Ministry of Economy, Trade and Industry and the Japan Health Conference, COLOWIDE Co., Ltd. has been certified as a “Health Management Excellence Company” for two consecutive years. Furthermore, eight Group subsidiaries (COLOWIDE MD Co., Ltd., ATOM CORPORATION, REINS international inc., Freshness Co., Ltd., KAPPA-CREATE CO., LTD., OOTOYA Holdings Co., Ltd., OOTOYA Co., LTD., and Cocot Co., Ltd.) have also received the same certification. The Group is committed to enhancing employees' health awareness and creating a more employee-friendly workplace environment across all its subsidiaries.

Store Strategies

　Regarding store policy, in April 2024, we welcomed Nihon Meika Souhonpo Co., Ltd. (currently N Baton Company Ltd.) into the Group, and in June of the same year, we welcomed Socio Food Service Inc. into the Group. Meanwhile, in order to concentrate management resources on the restaurant business at ATOM CORPORATION, we transferred the karaoke business to Shin Corporation Ltd. in March 2025. In Japan, we are focusing on opening restaurants in suburban areas, along roadsides, and in shopping centers. In particular, the food court specialty store “Gyu-Kaku Yakiniku Shokudo,” produced by Gyu-Kaku, has grown to over 60 stores, and “Tonkatsu Kagurazaka SAKURA” has also grown to over 40 stores. Overseas, we have started opening stores in the Middle East, which is a new area we are developing, while continuing to open Gyu-Kaku and On-Yasai stores mainly in Indonesia and other existing markets.

Store Openings and Closings

　As a result, we opened 84 new directly managed restaurants while closing 62 stores, and closed 13 directly managed izakaya restaurants. As a result, the number of directly managed stores as of the end of the current consolidated fiscal year was 1,424, and the total number of stores including franchisees was 2,586. Furthermore, to support future growth, we have also secured funds for M&A through a new share issuance in September 2024.

Financial Results for the Fiscal Year Ending March 2025

　We have been implementing the above initiatives; however, due to factors such as rising raw material prices, increased labor costs, etc. and foreign exchange losses, consolidated results for the current consolidated fiscal year were as follows: revenue of 269,156 million yen, business profit of 9,305 million yen, profit of 2,255 million yen, and profit attributable to owners of parent of 1,249 million yen.
The segment-based revenue of our Group is as follows: COLOWIDE MD Co., Ltd. 96,144 million yen, ATOM CORPORATION 35,504 million yen, REINS international inc. 92,384 million yen, KAPPA-CREATE CO., LTD. 73,209 million yen, OOTOYA Holdings Co., Ltd. 31,385 million yen, and others 42,476 million yen. Please note that the segment-based revenue figures do not take into account inter-segment revenue or transfers between segments.

Future Outlook

　For the fiscal year ending March 2026, the global economy is expected to remain sluggish due to the impact of the new US administration's high tariff policy, the slowdown in the Chinese economy, and geopolitical risks in Europe and the Middle East. In Japan, wage increases are expected to continue, particularly among large companies, and the number of small and medium-sized companies planning wage increases is also increasing. It is anticipated that efforts to pass on wage increases to sales prices will strengthen. In the food service industry, the situation is expected to remain uncertain due to continued cost pressures and labor shortages, and it will be necessary to continuously enhance the appeal of products and services in order to pass on price increases appropriately.
　In this environment, our Group is striving to enhance its corporate value over the medium to long term by promoting business initiatives based on the medium term management plan, “COLOWIDE Vision 2030.” While maintaining our domestic meal service business as our foundation, we aim to achieve consolidated revenue of 500 billion yen by the fiscal year ending March 2030 through the growth of our overseas meal service business, which is expected to expand, and our newly launched full-scale catering service business, thereby striving to enhance our corporate value.