VIA Holdings,Inc. Q4 FY2025 earnings call

Company Background & Strategic Transition

• Via Holdings originated as a printing company, entered the food service business in the 1990s, exited printing in 2013, and currently operates 30 brands across 35 Japanese prefectures, 75% izakaya format and 25% restaurant format.
• Completed a 5-year restructuring plan after 5 consecutive years of annual ordinary losses through FY2023 March, achieved its first full black ink in 6 years in FY2024 March, and marks FY2025 March as the first year of revenue growth after returning to profitability.
• Has transitioned from a restructuring-focused recovery phase to a re-growth phase, shifting strategy from right-sizing store count to active investment in format remodeling, new concept development and human capital.

Core Operational Initiatives in FY2025 March

• Focused on improving revenue structure, enhancing core product quality, re-building cooking technical capabilities, launching new customer acquisition initiatives and testing SNS-based awareness building.
• Opened new experimental model stores across segments to test next-generation formats:
  • Launched 大衆食事処 みよちゃん食堂 (Miyo-chan Shokudo), a family cafeteria concept converted from existing road-side Ougiya locations, achieved profitability after 2 years of testing and will begin expansion in the coming fiscal year.
  • Rolled out the "Takumen" famous ramen collaboration concept to 50 Ougiya stores to attract non-drinking daytime customers and add new revenue streams to existing locations.
  • Opened the first Beniton outside Tokyo 23 wards in Kichijoji, with an adjusted menu targeting a broader demographic beyond business customers, has maintained consistent profitability since opening.
  • Relocated Beniton Nishi-Kasai, incorporated experimental findings from Kichijoji, and launched the 2-year limited test concept "Sakana to Ton" adding seafood menu options to the grilled pork format to test higher average check formats for central Tokyo.
  • Opened PASTEL Dining in Ebina Marui as a concept store testing an all-day dining model focusing on community engagement and local sourcing to adapt to shopping center foot traffic trends.
  • Opened the new Binchou Ougiya Nagoya Main Store in a prime central Nagoya location (first new Ougiya opening in 6 years), which has performed very strongly since opening, testing a new format for high-competition central urban locations that expands Ougiya's viable location types.

Human Capital & Governance

• Prioritizes human capital investment as the core of future growth, focusing on upskilling existing employees (called "expanding CANS") to improve labor productivity amid population decline.
• Implemented new personnel initiatives including an internal independent entrepreneurship program (4 approved candidates so far), diverse employment structures, and strengthened middle management to improve retention and expand career options.
• Improved the shareholder benefit program after years of gradual reductions during restructuring to attract and retain more shareholders.

New Mid-Term Strategy "Future Plan Next" (FY2025-FY2027)

• The 3-year new plan is built around addressing three core structural trends: rapid shrinking of the working-age population, sustained price and wage inflation, and shifting customer consumption patterns due to climate change.
• Centered on three core model transformations:
  1. Revenue Structure Model: Transform to balance existing and high-profit stores, pursue value growth, and integrate appropriate technology (DX, robotics, new equipment) with human capital to adapt to population decline.
  2. Format Model: Stay focused on the core value of high-quality product made by hand (binchou charcoal grilling), enhance that core value to match new market conditions, clearly communicate value to customers to earn appropriate pricing that absorbs rising costs.
  3. Full Human Capital Utilization Model: Upskill employees to expand their capabilities, expand work style options, improve productivity through reskilling, and integrate technology to create a balanced sustainable operating model.

Overall consolidated results: Total revenue for FY2025 March was 17.3 billion yen, an increase of 0.39 billion yen year-over-year. Operating profit was 0.19 billion yen, a 0.12 billion yen decrease year-over-year due to rising costs. Ordinary profit was 0.12 billion yen, also down 0.12 billion yen year-over-year. Net income after tax was a net loss of 0.01 billion yen, while pre-tax profit remained positive. Total store count at period end was 305 (276 directly operated, 29 franchised), a net decrease of 7 stores from the prior period after closing unprofitable locations.

By brand segment:

1. 扇屋 (Ougiya Yakitori): 174 stores, accounting for ~57% of total store count and ~60% of directly operated stores. Sales recovered above pre-COVID 2019 levels and grew year-over-year above 100%. Performance is core to the company's overall results, with ongoing focus on product quality improvement and revenue structure reform.
2. Pastel: Located primarily in shopping centers, sales finally exceeded pre-COVID 2019 levels in the second half of the fiscal year, growing year-over-year above 100%.
3. 日本橋紅とん (Nihonbashi Beniton): Concentrated in Tokyo's 23 wards, recovered faster than other segments post-COVID, with sales far exceeding 100% of pre-COVID levels year-over-year. It serves as the lead experimental segment for testing new store formats, operational models and cost structures for the broader group.
4. うおや一丁 (Uoya Ichicho): Large-format sashimi izakaya focused on urban business customers. Despite a structural decline in large group banquets, sales still exceed 100% of prior year levels. It acts as a key test segment for revenue structure reform amid volatile seafood raw material costs driven by climate change.

• Management targets year-over-year revenue and profit growth for FY2026 March, following a FY2025 second half pressured by sharp increases in logistics, labor and raw material costs.
• The first half of FY2026 March is expected to be challenging as the company executes further revenue structure reform, with management planning to recover performance in the second half (including the year-end and New Year holiday period) to hit full-year guidance targets.
• The new mid-term plan targets the development of scalable profitable new store formats that can succeed amid rising costs and population decline, with a goal of doubling profit from current levels through strategic transformation rather than just market share expansion.
• Management plans to open 2-3 new-format Beniton stores in central Tokyo (inside the Yamanote line) in FY2026, starting with a confirmed opening in August 2025.

• Industry-wide risks: Sustained raw material price inflation driven by yen depreciation, logistics constraints, and widespread labor shortages caused by declining working-age population, which continue to pressure profit margins.
• Segment-specific risks:
  • Large-format izakaya like Uoya Ichicho face sustained structural decline in large corporate group banquets, as consumer behavior has shifted away from large dense gatherings post-COVID.
  • Uoya Ichicho faces higher volatility in seafood raw material costs and availability, driven by climate change and ocean environment shifts that have reduced catch volumes for key products like squid, making cost planning more difficult.
  • Pastel's performance is highly dependent on shopping center foot traffic trends, which remain uncertain and variable post-COVID.
  • Road-side Ougiya locations face structural growth headwinds from shifting demographic and consumption patterns in suburban areas.

The provided transcript does not include a question and answer section.