■Main activity results

1. Execution of M&A domestically and internationally

Create Restaurants Holdings ＜3387＞ is working to review its portfolio with an eye on the post-COVID-19 pandemic, and as part of this, we were able to realize 2 M&A projects domestically and internationally. Both projects match the keywords of the medium-term management plan, “everyday life,” “standard,” and “community-based,” and can be evaluated as having a stable profit base.

(1) Bakery Restaurant “Wildflower” (US)

As of 2024/9/3, we acquired the business of the bakery restaurant “Wildflower” operating in Arizona, USA*. It has 16 stores centered around the state capital Phoenix, and has been supported as a bakery restaurant for everyday use that has been rooted in the region for over 30 years. The company positions the expansion of its business base through M&A in North America as an important pillar of its growth strategy, and in 2019, it acquired the Italian restaurant “Il Fornaio” (18 stores) mainly in California, but this case followed suit, and the aim is to accelerate business development in North America.

* The most recent results (fiscal year 2023) are sales of 43.9 million US dollars (approximately 6.2 billion yen) and operating profit of 2.8 million US dollars (approximately 0.4 billion yen). The business transfer fee is 28.2 million US dollars (approximately 4.09 billion yen).

(2) Hokkaido's representative ramen shop “Ebisoba Ichigen”

As of 2024/10/1, we have acquired shares of Ichigen Food Company Co., Ltd., which operates the ramen shop “Ebisoba Ichigen” representing Hokkaido ※. It features a highly unique soup that condenses the umami and flavor of sweet shrimp, and has received high praise as a unique presence, and in addition to the Sapporo Sohonten, it has a total of 10 stores (5 domestic stores, 5 overseas stores) at New Chitose Airport, Tokyo, Taiwan, and Hong Kong, and also sells souvenir ramen and cup ramen. There are aims to further deepen the noodle business type business, which is an everyday food, strengthen the brand Fort Folio by developing next core brands, and create synergy through group franchises, etc.

* The most recent financial results (for the fiscal year ending 2024/4) are sales of approximately 1 billion yen and operating profit of approximately 0.2 billion yen. The acquisition price is currently undetermined.

2. Further evolution of group federal management

(1) Implementation of cross-group organizational restructuring

As of 2024/6/1, the consolidated subsidiary Create Dining Co., Ltd. and LG&EW Co., Ltd. merged. There are aims to strengthen expertise and promote the mobility of human resources through knowledge aggregation in the dining business area. As a result of this incident, the core brands “TANTO TANTO,” “AWKitchen,” “Mr. Farmer,” and “Yasaiya Mei,” have been reorganized from the specialty brand category to the CR category.

(2) Consolidation of contract businesses

On 2024/9/1, the contract (contract operation) business within the group was consolidated into Create Restaurants Co., Ltd. (total number of stores is 116). Aims include strengthening expertise such as knowledge and know-how in the contract business, collaborating with CREATE RESTAURANTS's network and product development capabilities, and improving the efficiency of human resource allocation. As a result of this incident, in addition to golf course restaurants, leisure facility restaurants, etc., it is planned to further accelerate store management contracts for the “Minori Minoru” brand, etc. based on a comprehensive business alliance with JA Zenno concluded in 2024/1.

(Written by FISCO Visiting Analyst Ikuo Shibata)