The current business environment continues to involve high uncertainty. Globally, the future remains uncertain due to prolonged geopolitical risks. In Japan, while inflation is taking root, large fluctuations in foreign exchange rates and continued high prices are putting pressure on corporate profits. In addition, the Bank of Japan's move to a "world with interest rates" is becoming more realistic, and the impact on financing and operating costs should be closely monitored. In addition, labor shortages and intensifying competition to secure human resources are putting increasing pressure on wage increases, and optimizing the cost structure and improving productivity have been urgent issues for End.

At the same time, Japan's rapidly aging population is creating unprecedented social needs for extending healthy life expectancy and improving the quality of long-term care services, which represent significant growth opportunities for our group. Against the backdrop of the government's promotion of "comprehensive community care" and a shift to focusing on the well-being of people, the social expectation and importance of our "health solutions through exercise" continue to rise.

the First Quarter Financial Results for the Fiscal Year Ended March 2027: Achievements and Specific Progress of Structural Reform

For the consolidated cumulative period under review, the First Quarter achieved growth in both sales and income, with net sales of 16,405,000,000 yen (up 5.4% year-on-year), operating income of 361 million yen (up 642 million yen year-on-year), ordinary income of 162 million yen (up 680 million yen year-on-year), and net income attributable to owners of parent of 74 million yen (up 47.4% year-on-year). Despite an increase in personnel expenses, etc., the Company made efforts to carefully select capital investments and reduce water and utility expenses, and profit levels remained as planned.
In light of M & A and business scale expansion, the Company has changed its reporting segments to 3 from the current fiscal year: Sports Club and Related Business, Home Fitness Business, and Nursing Care and Rehabilitation Business. The status of each segment is as follows.

< Sports clubs and related businesses >
New membership at the beginning of the fiscal year was steady due to the successful development of the sales structure. In particular, synergies from the merger with the former Sports Oasis were in full swing, resulting in strong sales of corporate members for corporations and health insurance, and a significant improvement in the number of junior members joining and leaving due to the stabilization of swimming school operations.
In addition, while we closed 2 facilities in Osaka Prefecture at the end of June as part of our efforts to reform our income and expenditure structure, in July we acquired 8 facilities from Tokyu Sports System Co., Ltd., and started new operations as “Atrio Due Next ” and“ Atrio light ”. In our peripheral businesses, the PPP (public-private partnership) business and the community health promotion business, we are making steady progress in expanding partnerships with multiple local governments.
As a result, net sales increased 4.8% year on year to 14,664,000,000 yen, and segment profit increased 159.3% year on year to 1.22 billion yen.

< Home Fitness Business >
In EC sales, the Stepper Series performed well, and the new facial beauty product “Styly Face Petit, ” which went on sale in May, started off well. In this segment, net sales decreased 17.1% year on year to 837 million yen, and segment profit decreased 40.2% year on year to 155 million yen. However, this was due to a conservative estimate at the beginning of the fiscal year, and actual progress has exceeded the plan.

< Nursing Care Rehabilitation Business >
Kaede no Kaze, which was made a subsidiary in December 2025, performed as planned. In addition, in April of this year, we started the brand conversion of 5 facilities of Myreha, which we acquired the business, to Genki Gym, and are working to improve profitability through the addition of individual functional training. As a result of these effects, net sales increased significantly to 903 million yen (up 64.0% year-on-year), and segment profit returned to the black to 21 million yen (up 51 million yen year-on-year).

Cash Flow

As the performance of existing sports clubs exceeded the plan, operating cash flow for the consolidated cumulative period under review in the First Quarter exceeded the plan by approximately 500 million yen, demonstrating strong cash generation capability.
Although the business environment is challenging due to increases in various costs and rising interest rates, progress in all segments exceeded the plan.

2026 -2030 Medium-Term Management Plan: Transformation for the Future

As announced at the time of the financial results announcement in May this year, our company is moving forward with the new medium-term management plan under the banner of "eliminating dependence on sports clubs" based on reflection on the past medium-term management plan. Our basic policy is as follows.

・Reform the income and expenditure structure of the sports club business: Increase value from "a place to exercise" to "a place to live in enriches." Pursue profitability of all facilities through thorough cost reduction and DX utilization.

・Expand business around sports clubs: Expand PPP business, community health promotion business, and BtoB solution business.

・Accelerate growth of other businesses: Develop inactive segment in Home Fitness Business. In Long-Term Care Rehabilitation Business, expand Genki Gym and collaborate with Kaede no Kaze to advance into severe areas.

・Control and improve efficiency of headquarters costs: Build a muscular structure through active use of digital and AI.

・Strengthen financial structure and focus on capital efficiency: Give top priority to improving financial structure through reduction of interest-bearing debt (Phase (1)), and then move to re-growth and active shareholder returns (Phase (2)).

Financial targets and cash allocation

The targets for fiscal 2030 under the Plan are net sales of 77 billion yen, operating income of 3.5 billion yen, ROE of 10%, ROIC of 6%, and dividend payout ratio of 40%.
Of the operating cash flow of 26 billion yen to be generated over the next 5 years, 14 billion yen will be used for reduction of interest-bearing debt to achieve financial soundness and shareholder returns of 2 billion yen.
As CFO, I will promote a clear shift to management that generates returns exceeding the cost of capital and maximizes capital efficiency.

Aiming to evolve into “A well-being co-creation company in the age of the 100-year life span” the entire company will work as one to achieve sustainable growth. We sincerely ask for your continued support.