June 2016

ITO EN, LTD.

Financial Results for the Fiscal Year Ended April 30, 2016

　

1. Beverage Market in Japan 2. Results of Operations FYE April 2016 3. Annual Forecasts FYE April 2017 4. Management 5. Category Results & Forecasts (Non-Consolidated) 6. Brand Strategy: Brand development and enhancement 7. Brand Strategy: Leaf 8. Brand Strategy: RTD Japanese Tea "Oi Ocha" 9. Brand Strategy: Healthy Mineral Barley Tea & TULLY'S COFFEE 10. Domestic Businesses: TULLY'S COFFEE & Chichiyasu 11. Overseas Businesses 12. Medium and Long-Term Management Plan

Index

1. About ITO EN

2. An Agricultural Model Striving to Solve Issues

3. CSR Initiatives

4. ESG information

5. Summary of Consolidated Balance Sheet & Others

6. Key Management Indexes (Consolidated)

（Appendix）

- 1 -

　 　 　

　 　 　

　 　 　

　 　 　

　 　

　Beverage market recovered in 2015. It is expected to expand in 2016.

85.2 217.1

447.0 375.0 383.0 405.0 401.0 415.0 430.0

579.3

484.3 497.5 488.5 480.0 475.5 458.0 464.5

648.9 538.5 642.5 680.0 698.0 705.0 720.0 730.0

922.3 955.1

948.0 952.0 938.7 929.3 942.0 947.0

145.6 159.2 150.1

167.4 164.4 147.2 140.0 143.9

447.4 376.4 325.0 325.7 329.9 317.0 305.0

305.9

97.7 157.5 252.7 232.0 244.0 258.2 267.0

275.0 260.1 276.3

260.0 252.2 260.0 244.2 244.0 243.7 222.0

218.4 152.3 156.7 160.0 182.6 187.0

170.0

0

1,000

2,000

3,000

4,000

1980 1985 1990 1995 2000 2005 2011 2012 2013 2014 2015 2016

Forecast

Market Trend

Source : ITO EN

(Tea total) Other Tea

Carbonated

Coffee

Vegetable

Fruit

Mineral Water

Others/Functional

Sports Drink

1985

Pioneering of

Canned

Green Tea

1980

Pioneering of

Canned

Oolong Tea

(931.3)

(796.4)

(872.5)

1. Beverage Market in Japan

Carbonated

was popular

Coffee was

popular

Tea was Popular

3,540.3

Total

3,612.7

3,100.2

2,707.5

3,603.1 3,637.5 3,680.0 3,660.0

(871.5) (885.0) (876.5)

3,710.0

(873.0)

chart① グラフ② Market Size by Channel

Green Tea

chart②

グラフ③

3,678.0

34%

20%

35%

11% Super

markets

36%

Convenience

Stores

23%

Vending

Machines

16%

Others

25%

2010

38%

22%

29%

11% Super

markets

40%

Convenience

Stores

27%

Vending

Machines

16%

Others

17%

2015

Source: ITO EN

Inner circle (Market): Calendar year

Outer circle (ITO EN): May 2015 to Apr 2016

(894.5)

(¥billion)

Market

ITO EN

-3.0

-1.0

-8.0

5.0 5.0

1.0

2.0 6.0

-1.0

2.0

3.0

1.0

4.0

-1.0

4.0

4.0 2.0

1.0

-12.0

6.0 7.0

1.0

-2.0

6.0

2.0

1.0

4.0 5.0

0.0

1.0

1.0

4.0

-15

-10

-5

0

5

10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

YOY（％）

ITO EN（％）

Market（％）

Monthly Sales Trends chart③

- 2 -

　

■Summary of Operations （Consolidated and Non-Consolidated） （\ million） ■Performances of Subsidiaries （\ million）

SalesComposition

SalesComposition

YOY %Change

YOY %Change

209.4%1456.5%187.8%

1022.6%6.6%

-19.4%5.3%

188.4%1.8%

-0.1%24.7%72.7%

--

2.6% 3.7% 51.4% Exchange rate （US$） ¥119.3

2.6% 3.2% 34.2%（average during a year）

-　 -　 -　

1.7% 1.9% 18.1%

100.0% 100.0% 3.3%

46.4% 46.6% 3.6% Sales Changes

1.8% 3.3% 84.2%Changes in

Product Mix, etc.

2.0% 3.5% 85.0%Fluctuations in RawMaterial Costs, etc.

For the YearEnded

Apr. 30, 2016

Conso

lidat

ed

　Net Sales 430,541 100.0% 465,579 100.0% 8.1%

For the YearEnded

Apr. 30, 2015

For the YearEnded

Apr. 30, 2016

Upper: Net SalesBottom: Operating

Income

For the YearEnded

Apr. 30, 2015

83,781$thousand 241,087$thousand1,108$thousand 12,441$thousand　Gross Profit 207,409 48.2% 218,818 47.0% 5.5%

ITO EN(North America)

INC.

9,340 28,89695 1,489

Tully's CoffeeJapan Co., Ltd

26,036 27,7513,572 2,879

　Selling Commission 74,468 17.3% 77,574 16.7% 4.2%

Chichiyasu Company13,186 13,890

87 253　Advertising 13,759 3.2% 11,056 2.4% -19.6%

Domestic Subsidiaries76,518 77,9152,108 2,106

　Transportation 11,455 2.7% 12,184 2.6% 6.4%

Foreign Subsidiaries5,841 7,284

212 366　Depreciation and Amortization

13,611 3.2% 13,988 3.0% 2.8%

Elimination of InternalTransactions

-54,135 -55,431-1,162 -1,785

Selling, General and Administrative Expenses

196,016 45.5% 201,574 43.3% 2.8%

Extraordinary Expensesand Income

-336 -148

　Net Income 7,292 8,615

　Operating Income 11,393 17,243

　Ordinary Income 11,229 15,074

¥111.2

■Breakdown of Gross Profit Change(Non-Consolidated)

For the Year EndedApr. 30, 2015

For the Year EndedApr. 30, 2016

Non-C

onso

lidat

ed 　Net Sales 353,754 365,276

　Gross Profit 164,289 170,229

　Ordinary Income 6,929 12,821 -0.2 0.4

-4.5 5.3

　Operating Income 6,478 11,934 -0.2 0.2

2. Results of Operations FYE April 2016

(¥ billion)

- 3 -

　

■Summary of Operations （Consolidated and Non-Consolidated） （\ million） ■Forecasts of Subsidiaries （\ million）

SalesComposition

SalesComposition

YOY %Change

YOY %Change

-6.2%1.2%2.2%

10.1%5.6%4.2%4.7%

18.5%-28.5%-47.3%-1.5%28.4%

--

3.7% 4.2% 16.0% Exchange rate （US$） ¥110.0

3.2% 4.1% 28.7%（average during a year）

-　 -　 -　

1.9% 2.5% 37.0%

100.0% 100.0% 1.3%

46.6% 46.5% 1.0% Sales Changes

3.3% 4.2% 29.9%Changes in

Product Mix, etc.

3.5% 4.6% 33.4%Fluctuations in RawMaterial Costs, etc.

For the YearEnding

Apr. 30, 2017 Est.

Conso

lidat

ed

　Net Sales 465,579 100.0% 471,500 100.0% 1.3% ITO EN(North America)

INC.

For the YearEnded

Apr. 30, 2016

For the YearEnding

Apr. 30, 2017 Est.

Upper: Net SalesBottom: Operating

Income

For the YearEnded

Apr. 30, 2016

　Selling Commission 77,574 16.7% 77,489 16.4%

28,896 27,0961,489 1,506

　Gross Profit 218,818 47.0% 221,400 47.0% 1.2%

-0.1%Tully's CoffeeJapan Co., Ltd

27,751 29,3002,879 3,000

241,087$thousand 246,335$thousand12,441$thousand 13,700$thousand

Chichiyasu Company13,890 14,550

253 300　Advertising 11,056 2.4% 12,364 2.6% 11.8%

Domestic Subsidiaries77,915 55,7452,106 1,109

　Transportation 12,184 2.6% 12,019 2.5% -1.4%

Foreign Subsidiaries7,284 7,173

366 470　Depreciation and Amortization

13,988 3.0% 11,874 2.5% -15.1%

Elimination of InternalTransactions

-55,431 -32,364-1,785 -1,885

Selling, General and Administrative Expenses

201,574 43.3% 201,400 42.7% -0.1%

Extraordinary Expensesand Income

-148 -700

　Net Income 8,615 11,800

　Operating Income 17,243 20,000

　Ordinary Income 15,074 19,400

¥119.3

■Breakdown of Gross Profit Change(Non-Consolidated)

For the Year EndedApr. 30, 2016

For the Year EndingApr. 30, 2017 Est.

Non-C

onso

lidat

ed 　Net Sales 365,276 370,000

　Gross Profit 170,229 172,000

　Ordinary Income 12,821 17,100 0.4 -0.5

5.3 2.2

　Operating Income 11,934 15,500 0.2 0.1

3. Annual Forecasts FYE April 2017

(¥ billion)

- 4 -

　

Investment on Software 271 225 372 362 519

Capital Investments 6,368 4,663 3,359 8,241 7,024

Depr. and Amort. 3,917 4,204 4,568 5,203 5,366

Leased Assets Depr. 9,851 10,936 11,085 10,872 8,099

-10,979 -12,456 -12,143 -11,236 -10,765Repayment of Lease obligations

(from investing activities)

4. Management

24,042 24,300

17,751

30,085

25,700

△ 9,272

△ 4,598

△ 9,242 △ 8,150 △ 7,920

14,769

19,702

8,508

21,935

17,780

△ 15,000

△ 5,000

5,000

15,000

25,000

35,000

'13/4 '14/4 '15/4 '16/4 '17/4

Est.

(¥ million) CF from operating activities

CF from investing activities

Free CF

Consolidated Cash Flow Management Strategies

Bolstering domestic infrastructure on the way to becoming a global tea company

1．Improving earnings of domestic businesses ・Acquire new customers

・Strengthen sales-visiting

Strengthen ties with existing customers and

strengthen introducing

・Strengthen Branding

Enlarge share in major brand (over 10 million cases

sales in annual)

Enlarge share in the Green tea leaves

Introducing foods labeled with health-promoting benefits,

making point-of-sale suggestions

・Action for Agricultural Production Corporation

・Promote to improve profitability on vending machines

・Reducing and streamlining distribution costs

・Reducing total costs and boosting cost effectiveness

・Generate synergetic effects among the group

2．Expansion and further growth of overseas businesses ・Expand ITO EN (North America) business and

growth investment

・Lay the foundation and expand business in Asia 3．Strengthen ROE management ・Higher profitability and capital efficiency

・Increase EPS

・Stable return to stockholders

- 5 -

　

（\ million）

For the Year EndedApr. 30, 2015

For the Year EndedApr. 30, 2016

For the Year EndingApr. 30, 2017 Est.

YOY %Change

SalesComposition

YOY %Change

SalesComposition

YOY %Change

SalesComposition

353,754 -2.7% 100.0% 365,276 3.3% 100.0% 370,000 1.3% 100.0%

31,025 1.3% 8.8% 32,468 4.7% 8.9% 34,101 5.0% 9.2%

319,471 -3.1% 90.3% 329,455 3.1% 90.2% 332,465 0.9% 89.9%

3,257 6.8% 0.9% 3,351 2.9% 0.9% 3,433 2.4% 0.9%

173,201 -0.1% 49.0% 181,126 4.6% 49.6% 184,288 1.7% 49.8%

16,437 -0.7% 4.6% 17,483 6.4% 4.8% 16,813 -3.8% 4.5%

44,023 -11.7% 12.4% 42,931 -2.5% 11.7% 42,745 -0.4% 11.6%

13,372 -1.0% 3.8% 10,933 -18.2% 3.0% 9,982 -8.7% 2.7%

33,935 9.1% 9.6% 41,143 21.2% 11.3% 42,386 3.0% 11.5%

10,537 -17.4% 3.0% 6,082 -42.3% 1.7% 6,072 -0.2% 1.6%

5,373 -14.8% 1.5% 6,918 28.8% 1.9% 6,913 -0.1% 1.9%

8,128 -10.3% 2.3% 9,312 14.6% 2.5% 9,568 2.7% 2.6%

10,080 -13.0% 2.8% 9,751 -3.3% 2.7% 9,870 1.2% 2.7%

4,382 -24.2% 1.2% 3,772 -13.9% 1.0% 3,824 1.4% 1.0%

　Net Sales

Bre

akdo

wn o

f D

rinks

　Japanese Tea /Healthy Tea

　Chinese Tea

　Vegetable

　Fruit

　Coffee

　Black Tea

　Functional

　Mineral Water

　Carbonated

　Others

　Tea Leaves

　Drinks

　Others

5. Category Results & Forecasts (Non-Consolidated)

- 6 -

100%

vegetable

6. Brand Strategy: Brand development and enhancement

Major brands (brands selling over 10 million cases) and products selling well

Leaf RTD Green

Tea

RTD Barley

Tea

Canned

bottle

coffee

FOSHU &

Foods with Functional Claims

【Enlarge share in major brand】

Brand Strategy 1．Strengthening the brand lineup 2．Sales related to tea (leaf) and beverages 3．Development of new containers

Creation of selling spaces 1．Product launches and point-of-sale suggestions 2．Commitment to visiting customers

Proprietary hydrogen

encapsulation method

(Patent No. 5746411)

Hydrogen

Water

“Aojiru ” (Green

Juice)

- 7 -

Initiatives aimed at demand creation to boost sales of tea (leaf)

7. Brand Strategy: Leaf

Meeting the Inbound Demands

■Holding of large tea ceremonies around Japan

Conduct when enjoying tea by employees holding tea-related certification (tea tasters)

at Senso-ji, Tokyo Apr 2016

■Tea bags continued to perform well

Tea bags

Up 10％ YOY

■Stimulating demand for chilled green tea

Green Tea Leaves Demand Awakening

■Opening directly-operated specialty stores for tea in airports with large numbers of foreign visitors

16.0 17.0 19.1 19.7 20.3

3.2 3.4

3.6 4.2 4.7

38% 39% 41% 42% 44%

0%

20%

40%

60%

80%

0

10

20

30

'11 '12 '13 '14 '15

（¥ billion）

Tea bags

ITO EN share

Source: ITO EN, Market: Calendar year ITO EN: May to Apr

Instant

International terminal building at New Chitose Airport

TAX FREE ITO EN

グラフ①

Instant

Up 14％ YOY

Generating appeal for chilled tea

Reinforcing the product lineup

"Matcha Big Tea

Ceremonies" "Shincha (the first leaves of

spring) Big Tea Ceremonies"

Easy-to-Use Green Tea Product Market

■Expand ITO EN share while growing of easy-to-use products market every year

Promotion of ITO EN characterized by “Ocha (tea)”

May 2015 to Apr 2016 total

- 8 -

　　　　 　　　　

Expanding market share through total marketing

8. Brand Strategy: RTD Japanese Tea "Oi Ocha"

グラフ②

グラフ③

217.1

268.5 279.2 309.4

409.3

447.0 421.0 415.0 402.0

382.0 375.0 375.0 383.0 405.0 401.0

415.0 430.0

31%

28% 31% 33%

29% 29% 32%

34% 36% 37% 39% 38% 37% 35% 35% 35% 35%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

100

200

300

400

500

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Est.

(¥ billion)

ITO EN

Source: ITO EN, Calendar year

RTD Green Tea Market chart①

ITO EN share

Monthly Sales Amount Share of the RTD Green Tea in the supermarket

chart②

42% 39% 40% 40% 43% 41% 39% 39% 38% 42% 39% 40%

0%

20%

40%

60%

80%

100%

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

packages with designs using

autumn maple leaves

（late Aug 2015）

cherry blossoms

（late Jan 2016）

ITO EN

Source: INTAGE Inc. SRI, May 2015 to Apr 2016

Market share by sales amount for all green tea beverage PET containers and quantities (total for supermarkets)

Oi Ocha Brand Strategy The four types of “Oi Ocha” product Foods with Functional

Claims

Launched on

Jun 13

375ml ¥1,000

■ Expand the tea-drinking population by

conveying the good taste of tea

■ Strengthening the four major products plus some extra

Product groups that stimulate demand and

the ability to create selling spaces

■ Share the increase and strengthening of brand

power in all business categories

Stimulating new demand and generating appeal for iced tea

Launched on

Jun 13

525ml ¥140

500ml ¥143

(all tax excluded)

- 9 -

　　　　 　　　　

Roasting technologies to bring out aroma and flavor

11% 12% 13% 14% 16% 20%

40% 41% 39% 38% 35% 31%

0

4

8

12

16

0%

20%

40%

60%

80%

100%

'10 '11 '12 '13 '14 '15

（million cases）

グラフ②

9. Brand Strategy: Healthy Mineral Barley Tea & TULLY'S COFFEE

13.6

31.2 32.2 34.5 39.5 45.5 51.0

63.0 71.0 75.0

144.5 133.0 126.5 120.0 118.0 122.0

122.0 112.5 115.0

0

50

100

150

200

'08 '09 '10 '11 '12 '13 '14 '15 '16 Est.

(¥ billion)

45% 52% 60% 58% 61% 47% 55% 56% ITO EN

share

(Barley Tea)

52%

Blended Tea

Barley Tea

Source: ITO EN, Market: Calendar year ITO EN: May to Apr

May 2015 to Apr 2016 total

Up 13％ YOY

May 2015 to Apr 2016 total

Up 28％ YOY

600ml ¥130

Source Market: INTAGE Inc. SRI, 2010 to 2015 ITO EN: May 2010 to Apr 2015

Market share by sales amount for all coffee beverage containers and quantities (total for

supermarkets, convenience stores and drug stores)

PET bottles

201～599ml Can

Sales Volume of "TULLY'S COFFEE"

Others

126～200ml Can

RTD Healthy Mineral Barley Tea Brand Strategy

■No.1 share in Caffeine Free RTD tea *

■Aiming for 30 million cases

370ml ¥150 (all tax excluded)

Launched on

May 16

"TULLY'S COFFEE" Brand Strategy

Launched on

Apr 11 ■The 4th of our major brand (over 10 million cases sales annual sales)

■Continue to drive the bottle can coffee market

Changes in the barley tea and blended tea markets chart①

Change in composition ratio for coffee chart②

* Jan 2015 to Dec 2015

Launched on

Jul 4

- 10 -

（\ million）

YOY %Change

YOY %Change

YOY %Change

Tully's Coffee Japan Co.,Ltd 26,036 9.1% 27,751 6.6% 29,300 5.6%

Chichiyasu Company 13,186 3.4% 13,890 5.3% 14,550 4.7%

Domestic Subsidiaries 76,518 -2.8% 77,915 1.8% 55,745 -28.5%

　Net Sales 115,741 0.4% 119,558 3.3% 99,595 -16.7%

Tully's Coffee Japan Co.,Ltd 3,572 12.4% 2,879 -19.4% 3,000 4.2%

Chichiyasu Company 87 -59.9% 253 188.4% 300 18.5%

Domestic Subsidiaries 2,108 -6.6% 2,106 -0.1% 1,109 -47.3%

　Operating Income 5,769 2.0% 5,239 -9.2% 4,409 -15.8%

*Excluding ITO EN. Before elimination of internal transactions

　

For the YearEnded

Apr. 30, 2015

For the YearEnded

Apr. 30, 2016

For the YearEnding

Apr. 30, 2017 Est.

10. Domestic Businesses: TULLY'S COFFEE & Chichiyasu

TULLY'S COFFEE PRIME FIVE Tokyu-

Plaza-Ginza

■ Newly-opened stores performing steadily

・Actively opening shops in good locations

(As of Apr 2016 638 shops)

・Development of concept stores ■ Revitalizing existing stores ・Increase sales and average customer spend

5.4

12.5 13.9 13.9

15.3

19.3 21.0

23.8 26.0

27.7 29.3

299 328

357 375 410

461 513

555 588

638 663

0

250

500

750

1,000

0

5

10

15

20

25

30

35

'07/3 '08/3 '09/3 '10/3 '11/3 '12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

(Shops) (¥ billion)

Shop number：Including "CAFE-KAI"

Net Sales

Shops

TULLY'S COFFEE Business Overview

Chichiyasu Business Overview

■ Release of popular Greek yoghurt series

■ 130th anniversary – full-scale expansion into east Japan

Launched product of collaboration TULLY'S COFFEE & Chichiyasu

Topping popular “ice rush” shaved

ice with Greek yogurt from

Chichiyasu

TULLY'S COFFEE Tamachi Morinaga

Plaza Building

Introduction to new Tully's Coffee stores

Presenting a relaxing space surrounded by fireplaces Largest store in Tokyo

- 11 -

*Excluding ITO EN. Before elimination of internal transactions （\ million）

YOY%Change

YOY%Change

YOY%Change

ITO EN (North America) INC. 9,340 17.7% 28,896 209.4% 27,096 -6.2%

11,801 17.1% 31,741 169.0% 29,846 -6.0%

105,971$thousand 5.8% 264,929$thousand 150.0% 271,333$thousand 2.4%

3,380 36.0% 4,438 31.3% 4,423 -0.3%

　Net Sales 15,181 20.8% 36,180 138.3% 34,269 -5.3%

ITO EN (North America) INC. 95 -82.0% 1,489 1456.5% 1,506 1.2%

175 -71.5% 1,581 802.4% 1,611 1.9%

1,877$thousand -69.5% 13,206$thousand 603.6% 14,648$thousand 10.9%

132 193.1% 275 107.5% 366 33.0%

　Operating Income 307 -53.3% 1,856 502.9% 1,977 6.5%

¥111.2 ¥119.3 ¥110.0

*Including DLTC company's results from the First half of FYE 4/2016

Asia/Australia business

Asia/Australia business

US business

Exchange rate （US$）

For the Year EndedApr. 30, 2015

For the Year EndedApr. 30, 2016

For the Year EndingApr. 30, 2017 Est.

US business

Australia

New York

Singapore

■ Expand "Global Brand" to various countries with a focus on the United States

11. Overseas Businesses（1）

2.0% 2.3% 2.9% 3.5%

7.8% 7.3%

0.0%

5.0%

10.0%

15.0%

20.0%

0.0

10.0

20.0

30.0

40.0

'12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

(¥ billion)

US business

Asia/Australia business

Overseas Business Sales Ratio

Target Over 10%

【To be a "Global Tea Company"】

1．Expanding size of business in the United States

・Add Company DLTC as a Group company

and implement new expansion

･Further expansion of the leaf business in addition to

the beverage business

2．Take on new challenges in Asian and Southeast Asian countries

・Product development that reflects the tastes of local markets

Global expansion with a focus on green tea beverages

and leaves (tea bags, instant, matcha )

Medium-term Target:

business dealings with Hundred

thousand stores overseas

- 12 -

　

　 11. Overseas Businesses（2）

Business in USA

Matcha enjoys popularity in places

such as IT firms in Silicon Valley

Developing tea shop the "matcha LOVE"

Beginning the Worldwide Expansion of the

Global Brand

Business in Asia

Offer RTD tea Green tea wave The spread of matcha Expand distribution channels

DLTC became a consolidated

subsidiary of ITO EN

Produce tea leaf in Australia and China Indonesia "kiyora" China (Shanghai・Hong Kong)

Produce tea leaf Started sales of RTD tea in China Develop into South-eastern Asia

To be a "Global Tea Company"

1．Over 10% overseas sales

composition

2． Sales toward profitability

in Asia

・ITO EN BEVERAGE (SHANGHAI), LTD.

moved into the black achieved a year

ahead of schedule

Thai ・Singapore

Launched in 2002 ・ Increase health consciousness

・ Matcha wave

・Japanese cuisine was

recognized by UNESCO as

an intangible cultural heritage

- 13 -

　

　

FYE April 2017

Net Sales: more than ¥500 billion

ROE: 10%

Payout ratio: 40% (Consolidated)

FYE April 2011

Net Sales: ¥351.6 billion Operating Income: ¥17.6 billion

ROE: 7.6% (Consolidated)

12. Medium and Long-Term Management Plan

1. Strengthen domestic foundation 2. Challenge to new field in Japan 3. Strategic investments for establishment of overseas business foundations

1. Strategic investments to becoming a domestic beverage maker 2. Expand business in China and Southeast Asia

To be a "Global Tea Company" - Long-term management vision ■Sustainable sales growth

■Maintain an OP margin level of domestic beverage business at least 5％ and

invest excess earnings for growth

ROE: 10% Payout ratio: 40%

To be a "Global Tea Company"

Bring forward a rich and healthy life to customer in the world

Improve brand building of

beverage, tea bag, and instant products

Improve new business field

CHALLENGE！ Final Year of the Medium-

term Management Plan

Medium and Long-Term

Management Plan when announced

Appendix 1

　

Basic Management Policy

1966 Established.

1980 Develops the world's first Canned Oolong Tea

1984 Develops the world's first Canned Green Tea.

(launched in 1985)

1989 Changes the name of Canned Green Tea products to “Oi Ocha.”

1990 Releases the world’s first PET bottled green tea drinks (“Oi Ocha” Green Tea, 1.5L).

1998 Stock advanced to the First Section of the Tokyo Stock Exchange.

2001 Established ITO EN (North America) INC.

2006 Tully's Coffee chain, into a consolidated subsidiary.

2007 Class 1 Preferred Stock listed on the First Section of the Tokyo Stock Exchange.

2014 30th anniversary of its launch of RTD green tea.

"Oi Ocha" total sales volume exceeded 25 billion bottles in total. *

2015 Beginning the Worldwide Expansion of the Global Brand.

（Appendix 1) About ITO EN Concept for Product

Development

Business Model of ITO EN

Corporate History

“Always Putting the Customer First”

ITO EN credo

Mission Statement

Our mission is to put the customer first, make integrity our stock in trade, spare no effort,

and earn the confidence and trust of society

*Converted to 500ml bottle as of Dec. 2014

Natural

Safe

Healthy

Well-

designed

Delicious

Customer

Voice System

Corporate-wide proposal system by employees & customers

Sales

Management

Production ・Quality control system

Direct visiting by the sales team members

Communication build-up,

Selling space proposals

Retailers/stores

R & D

・Block production

and logistics system

5 blocks

【Beverages】 Fabricationless

Production to reduce capital

expenditures and

transportation cost

【Leaves for green tea & coffee】 Own Manufacturing System

Realization of High Quality

■Own roasting plant

（Shizuoka Sagara Plant ：Shizuoka Prefecture） （ITO EN KANSAI CHAGYO in Hyogo)

■Central Research Institute （Established in parallel inside the Shizuoka Sagara Plant）

■Tea Leaves Plant ■Plant for tea bags manufacturing

Appendix 2

ITO EN AUSTRALIA PTY.LIMITED

Victoria, Australia

95,500

86,000 85,000 84,100 87,900

84,800 83,500 79,500

24% 25% 28% 27% 25%

23% 24% 25%

0%

10%

20%

30%

40%

50%

60%

0

20,000

40,000

60,000

80,000

100,000

'08 '09 '10 '11 '12 '13 '14 '15

(ton) Total Domestic Tea Leaf Production

ITO EN Consumption

ITO EN Consumption (%)

2,810 3,300

3,630 4,200

880 960 1,000 1,200

2,000

0

500

1,000

1,500

2,000

2,500

0

1,000

2,000

3,000

4,000

5,000

6,000

'13 '14 '15 '16

Est.

（ha） （ton） Production volume (ton)

Area of green tea farms (ha)

Long -term target 2000 ha

（Appendix 2) An Agricultural Model Striving to Solve Issues

Securing safe, reliable and high-

quality raw materials

Materials: Ministry of Agriculture, Forestry and Fisheries

Source: ITO EN

The current state of Japanese agriculture

Project of the Developing Green Tea-Producing Regions ■ Aging population and shortage of heirs

Agricultural worker population: 2.097 million

Average age: 66.4 (percentage 65 and older: 63.5%)

■ Problem of deserted cultivated land

Area of deserted cultivated land: Approx. 420,000 hectares

■ Current circumstances concerning the production of tea

30 percent of tea plantations contain trees at least 30 years old

and ages are increasing

→ Decreased yield and quality is a concern

Agricultural model

Overseas production (Australia)

Project to develop tea producing regions that will help solve issues in Japanese agriculture

70ha

（Domestic Tea Leaf Production：about 300ｔ）

Total Volume of Domestic Green Tea

Tokyo

Toyama

*Including contract cultivation farms

～Towards solving agricultural issues～

・Utilization of deserted cultivated land,

promotion of sixth-order industrialization

・Streamlining of effort and the promotion of

low-cost agriculture

・Creation of new entrants, high-quality

tea leaf production

・Stable revenue for tea farmers

～Business Characteristics～

1. Operation of large-scale tea plantations

2. Mechanization and introduction of IT

3. Introduction of proprietary

production technologies

4. Contractual dealings

Appendix 3

　

■New eco-friendly beverage carton ・ Prize of the Minister of the Environment in the

Global Environment Grand Prize Award (2016)

■NS system（Room-temperature aseptic filling method that does not use a sterilizer

to sterilize PET bottles.）

・Environmental Performance Award

(Outstanding Performance Award) (2015)

■Used tea leaves recycling system ・Prize of the Minister of the Environment

in the Global Environment Grand Prize Award (2011)

■The tea-producing region development project ・Nikkei Social Initiative Award for the corporate sector (2015)

■“Making Japan Beautiful Through Tea” and “Making Lake Biwa Beautiful Through Tea” ・Prize of the Minister of Economy, Trade and Industry

in the Japan Water Grand Prize award (2015)

■Oi Ocha New Haiku Contest

■Overall management ・Porter Prize (2013)

・Expansion of Individual Investors Award (2004)

・Disclosure Award (2004, 1999)

（Environment

）

E

（Society

）

S

　・Encouragement Prize of the review board of the Ministry of Education, Culture, Sports, Science and Technology for the recognition of enterprises for their support of young people’s activities (2015)

（Govern

ance

）

G

（Appendix 3） CSR Initiatives

Recognition from society

The ITO EN Group will thoroughly practice is management philosophy of putting customers first, tackle the seven core subjects as defined by ISO 26000, and strive to become a worldwide tea company.

CSR Initiatives

■ITO EN Group’s Fundamental concepts of CSR

(for each core subject of ISO26000) *Excerpts from the ITO EN GROUP CSR Charter Established in March 2013 and revised in February 2014.

Organizational governance

Labor practices

Human rights

Fair Business Practices

・Establishment of the corporate governance

・Communications with stakeholders

・Description of timely and appropriate

information disclosure

Environmental Initiatives

【Priority Theme of CSV】

Consumer Issues

Community Involvement

and Development

The seven core subjects of social responsibility ＜The basic idea of CSR＞

■Awards

【Non-aluminum beverage carton】

(Commonly called an eco-friendly carton)

NS = Non-Sterilant

【Eco-Friendly PET Bottles】

・PET bottle cap： 2.6g

（About 13% lighter）

・Label thickness：

45μm→20μm

・Bottle： 26g→19g

（500ml）

・Respect for basic human rights

・Creating a workplace characterized by diversity

・Improvement of workplace environment

(workplace environment improvement committee)

・Implementation of “no overtime” work days

・Tea taster system

・Devising of compliance system

(establishment of in-house reporting or “whistle-blower” counter, etc.)

・All departments across the Company,

including sales offi ces, received ISO

14001 certifi cation

・Maintenance of quality control system

・Ensure traceability

・Disaster support

・Self-cultivation through tea culture

Appendix 4

　

【The main activities and results】 （2014）

（Appendix 4） ESG information

Status of SRI index incorporation

Corporate governance policy

・FTSE4Good Index

Social Responsibility Index (SRI) provided by the UK-based FTSE (Financial

Times Stock Exchange).

Companies highly regarded from a perspective of environmental, social and

governance (ESG) are selected to serve as an important standard to instruct

the investment decisions of worldwide investors interested in social

responsibility on the part of companies.

■Establishment of corporate governance guidelines (Dec 2015)

Environmental and social initiatives

Major ESG initiatives

Products and Recycling

Sales and distribution

Production and Logistics Raw materials

■Shared value produced by a unique value chain

～Integrated system from tea plantation to tea grounds～

Highcapability to

procure crude tea

・Handles approximately one

quarter of Japan’s crude tea

production The Tea - Producing Region

Development Project

・The effective utilization

abandoned farmland

・Training tea farmer

Fabless method

（Beverage products）

・Reduction of capital

investment costs Quality control system

・Meet the consumer requests

for security and safety Block production and logistics systems

・Reduction of distribution costs

and rapid product supply

Route sales

・The community-based

sales system Retailers

・Protection inheritance of tea

culture and japanese tradition

Used Tea Leaves Recycling System

・Reduce costs through resource

conservation and recycling ・Eco-friendly

・Companywide reduction of 9.5% in CO2 emissions compared

with fiscal 2009 [unit requirement]

・Recycled corrugated cardboard employing

used tea leaves： 50 million cases

・Educational activities of green tea： 837 times

・91.5% food recycling rate

・83.9% installation rate of heat pump-type vending machines

・Aggressive adoption of an operation ratio for energy-saving

vehicles comprising 87.8%

Corrugated cardboard made with used tea leaves

Since 2011, ITO EN has been selected as one of the companies making up the international FTSE4Good index. (As of Jan 2016)

Appendix 5

Items 　　2015/4 　　　2016/4 　　　　Change　 Description of change

Current assets　 (Major contents）

　　Cash and deposits

Fixed assets　 (Major contents）

Land

Lease assets

Others

Intangible fixed assets　 (Major contents）

Goodwill

Total assets

Current liabilities　 (Major contents）

　 Notes and accounts payable

　　Short-term loans payable

　　 Current portion of bonds

　　Accrued expenses

　　 Income taxes payable

Non-current liabilities　 (Major contents）

　　Corporate bond

　　Long-term loans payable

　　Lease obligations

Total non-current liabilities

Total liabilities and net assets 127,761 127,215 △ 545

19,998 16,630 △ 3,368

158,185 160,486 2,301

20,000 - △ 20,000

30,551 29,653 △ 897

82,146 59,729 △ 22,417

21,325 23,194 1,869

1,251 3,945 2,694

803 1,801 998

- 20,000 20,000

33,304 33,353 48

285,947 287,702 1,755

76,038 100,756 24,718

Investments and other assets 18,192 20,012 1,820

27,791 20,179 △ 7,612

34,042 27,154 △ 6,887

27,511 31,219 3,708

19,413 20,644 1,231

80,115 81,018 903

48,922 53,259 4,336

33,190 29,154 △ 4,036

　　Notes and accounts receivable・ Inventories

86,183 88,609 2,426

（\ million）

153,597 159,517 5,919

（Appendix 5) Summary of Consolidated Balance Sheet & Others

Balance Sheet Change as of April 30, 2015 and 2016 Topix

Mainly related to vending

← machines, etc.

■For drinks – raw material tea processing plant

(expected completion image)

（Kobe Plant：Kobe Prefecture）

*Aug 2016 operation plan

・BCP response (strengthening west Japan)

・Reducing costs by shortening raw material

transportation times

Shizuoka Sagara Plant

（Shizuoka Prefecture） Kobe Plant

（Kobe Prefecture）

Major tea producing regions

Flow of raw tea materials

← Due to a calculation of

← the Fair Value of

← DLTC & other factors

← Due to increase in profit

← Bond redemption planned

for Feb 2017

← Deferred Tax Assets and

← other factors

■Bond Rating

A+

■Corporate bond

registration

Straight bond

60 billion yen

(unissued 40 billion yen）

■Equity ratio

'16/4 43.9％

'15/4 44.4％

■Net assets

Decreased 0.5 billion yen

（breakdown）

Capital surplus

△1.6 billion yen

Retained earnings

△3.3 billion yen

Valuation difference on

available-for-sale securities

△0.2 billion yen

Foreign currency

translation adjustments

△1.3 billion yen

Remeasurements of

defined benefit plans

△0.7 billion yen

others

Appendix 6

332.9 351.6

369.2

403.9

437.7 430.5

465.5 471.5

50.9 50.6 52.1 52.4 51.6 51.8

53.0 53.0

35

45

55

65

0

100

200

300

400

500

'10/4 '11/4 '12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

（％） (¥ billion) Net Sales

% Cost of Sales

12.4

17.6 18.9 20.2

21.1

11.3

17.2

20.0

3.7

5.0 5.1 5.0 4.8 2.6

3.7 4.2

2

4

6

8

10

12

0

5

10

15

20

25

'10/4 '11/4 '12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

（％） (¥ billion) Operating Income

% Operating Income

38 38 38 38 39

40 40 40

48 48 48 48

49 50 50 50 81.4

65.6

54.4 44.5 42.4

72.0

61.0

44.5

(10)

10

30

50

70

90

110

130

0

20

40

60

80

'10/4 '11/4 '12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

Dividend（Common Stock）

Dividend（Preferred Stock）

Payout Ratio

（Appendix 6) Key Management Indexes (Consolidated)

17.1 19.7

21.4 24.0 24.3

17.7

30.0

25.7

-6.5

-2.1

-8.0 -9.2

-4.5

-9.2 -8.1 -7.9

10.6

17.5

13.3 14.7

19.7

8.5

21.9

17.7

-20

-10

0

10

20

30

'10/4 '11/4 '12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

(¥ billion) ＣＦ from Operating Activities

ＣＦ from Investing Activities

Free ＣＦ

1.8 1.8

5.3 6.3

4.6 3.3

8.2 7.0

3.1 3.4

3.6 3.8 4.1 4.5

5.2 5.3

3.8 5.5

7.2

9.8

10.9 11.0 10.8

8.0

0

2

4

6

8

10

12

'10/4 '11/4 '12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

(¥ billion) Software

Capital Investments

Depr. & Amort.

Leased Assets

Depr.

グラフ③

（¥） （％）

5.9

7.6

9.2

11.2 12.0

7.2

8.6

11.8

6.0 7.6

8.9

10.3 10.4

5.9 6.8

9.1

0

5

10

15

20

25

0

5

10

15

'10/4 '11/4 '12/4 '13/4 '14/4 '15/4 '16/4 '17/4

Est.

（％） (¥ billion) Net income

ROE

Net Sales & % Cost of Sales Operating Income

Dividend & Payout Ratio Capital investments & Depr. & Amort. Cash Flow

chart①

chart⑤ chart④

chart②

chart⑥

Net Income & ROE chart③

The purpose of the materials you have received is to provide the means for a more thorough understanding of ITO EN and should not necessarily be

regarded as a recommendation to invest. Furthermore, the data in these materials is based on what we believe is the most accurate information.

However, please understand that even without advance notice, both past data and future forecasts may be revised.