■Progress and future direction of Create Restaurants Holdings' Medium-Term Management Plan ＜3387＞

1. Progress of the medium-term management plan

In the medium-term management plan announced in April 2022, three growth strategies have been set out for a new stage of growth, and a three-year road map has been promoted with “HOP” for the 2022/3 fiscal year, “STEP” for the 2024/2 fiscal year, and “JUMP” for the 2025/2 fiscal year. In other words, we are focusing on (1) reviewing portfolios with an eye on post-COVID-19, (2) further evolution of group federal management, and (3) improving productivity and responding to human resource shortages through DX promotion. In the 2025/2 fiscal year, which is the final year, finishing touches will be carried out as a leap year for the 25th anniversary of our founding, and we will also work on formulating the next medium-term management plan (starting 2026/2) and strategy with an eye on environmental changes (scheduled to be announced around 2025/4).

2. Progress so far and initiatives for the 2025/2 fiscal year

(1) Reviewing portfolios with an eye on post-COVID-19

It maximizes “ability to respond to change,” which is the strength of the company group, and is working on brand development that responds to post-COVID-19 demand, such as “everyday life,” “standard,” “community-based,” and “low investment,” and in 2022/12, Saint-Germain and others, which develop bakery business categories, were added to the group. Also, in the 2024/2 fiscal year, based on changes in customer lifestyles, etc., concept sheets for each of the 25 core brands were created under the policy of aiming to shift from location business (emphasis on location) to brand business (emphasis on brand) up until now, and in addition to redefining concepts, organizational changes and in-group store transfers were carried out in order to further enhance expertise and efficiency. For the 2025/2 fiscal year, we will continue to work on (1) an increase in the number of customers (number of repeaters) *1, (2) strengthening the contract business*2, and (3) pursuing the uniqueness of the CR Group*3.

*1 Improvement of repeater ratios by utilizing CRM (customer data) and strengthening storefront power (creating fans for stores), strengthening online reservations on the company's website (including SEO measures), etc.

*2 Acceleration of management contracts for the “Minori Minoru” brand through a comprehensive business alliance with JA Zenno, and development of new golf course restaurants, etc.

*3 Development of new business categories (including for Gen Z) and promotion of “exciting projects” centered around the Create Brand Lab.

(2) Further evolution of group federal management

While the external environment is unstable, such as the continuation of the COVID-19 pandemic and the progression of inflation, we are promoting “group integrated management,” and we have been working on revitalizing synergy within the group (group business type change/implementation of FC within the group), personnel allocation across groups, standardization of foodstuffs, and logistics reviews. For the fiscal year ending 2025/2, we will work on organizational restructuring* within the group.

*LG & EW is scheduled to be absorbed and merged into Create Dining for the purpose of further strengthening expertise and promoting mobility of human resources (as of 2024/6/1).

(3) Improving productivity and responding to human resource shortages through DX promotion

Centering on the DX Promotion Office, which was newly established on 2021/8/1, we are working on introducing expense reimbursement systems, self-checking/serving robots, mobile orders, etc. in addition to intra-group workflow systems, etc., and we have been working to resolve the bottleneck of lack of human resources, starting with improving work efficiency and improving convenience for customers. Also, in March 2023, a “human resources project team” was established to strengthen human resources across the group, and a “basic policy on human resources” was established. Based on the recognition that human resources are “an extremely important source for creating sustainable growth,” they are promoting the expansion of employee salary increases, increases in hourly wages for crews, enhancement of training systems, and the creation of comfortable workplaces. For the fiscal year ending 2025/2, we will work on (1) promoting DX at stores ※1, (2) expanding the total amount of salary increase funds*2, (3) promoting the active participation of foreign assets ※3, and (4) creating comfortable workplaces and promoting human resource exchange within the group ※4, and we will develop activities that are also conscious of DX to HX (human transformation).

*1 Improvement of reservation management efficiency through expansion of bashing robots (meal support), expanded introduction of mobile orders, use of AI for telephone reservations, and enhanced online reservations.

*2 An increase in the total amount of employee salary increase funds (from 4.1% in the 2024/2 fiscal year to a 5.0% increase in the 2025/2 fiscal year), and flexible responses to increases in crew hourly wages.

*3 Along with the expansion of recruitment of foreigners, a specialized department responsible for acceptance and follow-up was established. Furthermore, training foreign store managers, etc.

*4 Promoting the taking of public holidays and paid holidays and setting store holidays during off-season. Promotion of diverse work systems (introduction of expert positions to double track careers). Review of retirement age re-employment rules. Extension of employment for crew (part-time workers), planning and execution of events commemorating the 25th anniversary of the company's founding, etc.

3. Numerical planning (growth image)

Every year, the company has announced numerical plans for the next 3 years in the form of rolling. However, for this time, since the 2026/2 fiscal year onwards will shift to the period of the next medium-term management plan (scheduled to be announced around 2025/4), the baseline has been set as a growth image at the moment. For now, assuming continued organic and parade growth, sales revenue for the 2027/2 fiscal year is 163 billion yen (3-year average growth rate 3.8%), operating income of 12.1 billion yen (same 19.6%), and adjusted EBITDA of 29.3 billion yen (same 4.6%) for the fiscal year ending 2027/2, three years from now.

(Written by FISCO Visiting Analyst Ikuo Shibata)