Yes, I'm at. Thank you very much for attending the results briefing session for Food & Life Companies for the first half of financial year 2025. My name is Kawani Shi from IR. The materials used in this briefing session can be downloaded on our homepage from the IR library. In this briefing session, we will communicate the financial information as well as information related to the outlook of the future. Please note that these information are based on the current forecasts and assumptions, and due to risks and uncertainties, the actual results may differ from the current outlook. Now, we would like to start with the briefing questions. I would like to introduce today's speaker, President and CEO Mr. Masahiro Yamamoto, Executive Vice President and Corporate Officer Mr. Hiromitsu Kato, Mr. Kohei Nii, Senior Executive Corporate Officer, Mr. You Horie, Senior Executive Corporate Officer, Mr. Takeshi Yoshida, Corporate Officer. These are the five speakers. Handing over to Mr. Yoshida.
My name is Takeshi Yoshida. I am in charge of financials and IR activities. Nice to talk to you today. I would like to take you through the financial results for the first half of financial year 2025. In terms of revenue, it was JPY 203.814 billion. EBITDA was JPY 27.126 billion. Operating profit was JPY 19.535 billion. Profit for the period was JPY 11.869 billion. With regard to the store count on a group-wide basis, we have 1,174 stores, which is up by 50 stores year on year. As you know, compared to the previous year, we were able to achieve growth in revenue and profit. For both revenue and profit, we are making record high numbers. In November 2024, we made the announcement for FY 2025 full-year forecast, and you can see the progress versus such forecast.
As you can tell, we have a very good first half of the year. For FY 2025 full-year forecast, together with the Kensan Tanshin, we made the announcement of the upward revision. Yamamoto is going to take you through the details for that. Next, I would like to move on to the financial highlights by different segments. As you see, for domestic and international Sushiro business, we were able to improve revenue and profit, and those increases have driven the overall performance of the company. To your left, you see Japan Sushiro business. Like-for-like revenue was up from the previous year, and we were able to have good control of the cost. As a result, we are able to improve the profitability. Next, if you look at international business, second from the left, you see significant increase of revenue and profit.
All areas are performing well, but particularly Hong Kong, Thailand, mainland China did perform well, especially in mainland China, as Kato will be explaining later on. The situation was difficult in the first half of the previous year, but we've made a good improvement this year. Overseas, international Sushiro, we were able to achieve 1.8 times improvement of or 1.5 times improvement of sales, and we were able to increase the number of international stores by 54. Total business, the revenue and profit have slightly decreased. However, we closed non-performing stores, and we've initiated profit improvement activities, and we have reduced the number of stores by 26 to 224. Other business includes Sugidama business. We were able to achieve an increase in revenue and profit, and we have 93 stores, which is up by 11 stores.
Now, let me move on to the financial highlights by segment by quarter. To the left, you see Japan Sushiro business revenue, profit, both of them. In Q1, Q2 performed strongly. Overseas Sushiro business, we had impairment, and Q2 OP slightly decreased as a result. However, EBITDA was 19.5%, and then Q2 20%. In terms of the revenue mix, in Q2, this accounted for almost 30%. International overseas Sushiro business is nicely growing. Now, this is operating profit change analysis. OP margin itself was up to 9.6% from previous 7.0%, almost 3% improvement. The COGS of Japan Sushiro improved on top. The business performance improved in overseas Sushiro, and also their representation was up, and those made a positive impact on overall OP. Other income and expense improved by 0.6 point. As a result, in the first half, fiscal year 2025, OP became 9.6%.
This is profit for the period change analysis. In terms of the margin, it's improved by 1.7% from 4.1% to 5.8%. Japan domestic international Sushiro improved COGS, personnel cost, and other SG&A. We've had some negative factors in relation to the tax payment. This is because of the improved OP before tax. The negative factor on non-controlling interest was because of the good performance in Thailand. Just like OP, we were able to achieve very good profit for the period.
Next is on BSF Cash Flow. For the total asset, JPY 374.3 billion, increase of JPY 9.217 billion. A major variance is on asset side, trade and other receivables, plant and equipment, and cash and cash equivalent impact, and also on the liability side, corporate loans and borrowings and provisions decreased, and also the retained earnings increased by JPY 9.7 billion. Operating cash flow declined by JPY 2.5 billion to JPY 26.219 billion. Profit increased year on year. However, the allowance for the bonus and the allowance for the tax increase impacted. However, we consider this result to be satisfactory. The investment cash flow increased, outflow increased by JPY 2.2 billion and total JPY 11.632 billion. The operating cash flow is, in comparison to the operating cash flow, this has been under control. For finance cash flow, outflow increased by JPY 2.2 billion to JPY 11.632 billion.
Sorry, for financial cash flow, due to the increase of the repayment of lease liability, it increased, and as a result, cash at hand was JPY 47.336 billion, which is a satisfactory level. Also, the equity ratio improved to higher than 22%, and PBR is still below 1, but the improvement trend has been maintained. Next is store count and group total. This will be the last page that I will present. As of the end of the first half of 2025, on a group-wide basis, the store count is 1,174, and in urban areas, we opened new stores mostly. For overseas, there were an increase of 25 stores, and new openings of 27 were made, and also some closure. Taiwan, 4; Hong Kong, 2; Singapore, 1; Thailand, 2; China was also China of 9.
That was the details of the increase and decrease of the stores in the international market. Next, I would like to cover the FI 25 first half review and revision of first half FI 25 first half earnings and forecast. Each business heads will explain the details, and this page covers the summary. Domestic Japan Sushiro business in the first half, the brand promises the value to be offered to the customers, and that was revised, and we were focusing on reinforcement of the brand. We also focused on the proactive marketing and also steady improvement of the store operation. Therefore, the first half revenue, like-for-like, maintained at 107.2%. On the new stores, we concentrated selectively in the urban areas. We progressed in line with the plan, and the performance, operating performance, is also in line with the plan.
Next, on Sugidama, Kyotaru, Misaki, on Sugidama brand, we are expanding the new store openings, and the business is steadily growing. In April, we reached 105 stores. For Kyotaru, Misaki, their profitability continues to be improved, and also in last fiscal year, new type of store were opened, and the adjustment is continuing. Overseas Sushiro business in the first half, there were major contributions in driving the overall business, especially the business performance improvement in the mainland China was significant. In November last year, I talked about selective opening of the stores. That policy was further strengthened, and thanks to that, the store openings are progressing steadily. Along with adjusting the mainland China business, we are opening stores and redoing the rebalances in Asia and other countries, mostly in Thailand. In other Asian countries, we are making adjustments and progressing in line with the plan.
In terms of the numerical results, both top and bottom lines, we were able to exceed the plan. All in all, business is performing well. In response to that, the external environment, domestically and internationally, and the current business performance was taken into consideration in revising the numbers announced in November last year. FI 2025 forecast is at the center in green. The revenue was originally JPY 408 billion, but was updated to JPY 416 billion. Operating profit was revised from JPY 26 billion to JPY 32.5 billion, and the growth rate of the revenue revised from 13% to 15.2%. Operating profit percentage was revised from 6.4% to 7.8% on a consolidated basis. This page is on the revenue and operating profit, the breakdown of first half, second half, and full year in revenue. Pre-COVID, FI 2019, from that number for the first half, the growth is positive 111%.
Also, on a full year basis, it is 109%, more than double the growth. On operating profit as well, left-hand side bottom, plus 152% is the growth, and in full year, positive 123%. Both are more than double or nearly 2.5 times. The detailed numbers, the breakdown is shown on this table. Right-hand side, two columns. Please focus on these two columns. As I have said, revenue is shown here, and in addition, in terms of EBITDA, the initial performance forecast was 10.2%, but it is upwardly revised to 11.2%. OP margin from 6.4% to 7.8%, and also the EPS, JPY 132.6 to JPY 167.94. At the bottom, ROE, the target has been 20%, and the initial forecast was 18.6%, but now we are targeting 22%, and we believe this is achievable. This is on shareholder return in September of 2025.
The regular dividend was raised, and further 2.5% increase will be implemented to reach JPY 30 per share for fiscal year ending September 2025. We have paid a commemorative dividend, and that will be continued. That was the brief outline of the financial results.
One of the topics here is related to Expo 2025 Osaka Kansai, Japan. We have a booth called "Sushiro to the Future." The sustainability is the theme of the expo itself, and our booth is in line with the expo theme. We have a unique concept. It says "Sustainable Sushi Sourcing." That's the concept. We use marine products, and we use all aquaculture fishes to promote the sustainable sushi sourcing. We are depicting future sushi places, and our "Sushiro to the Future" has been well appreciated. We have new games for people to have fun. If you have an opportunity to visit, please visit our booth. That's all from me. Now, let me go through Japan business. My name is Nii, who's in charge of the Sushiro in Japan. I would like to take you through the activities we've conducted in the first half.
First, as Yamamoto earlier mentioned, we've focused on brand building. We operate sushi restaurants. We want our guests to enjoy tasty sushi, want our guests to have a good customer experience. In doing so, including part-timers, we've focused our efforts to improve the operation, and also we've executed compelling, attractive promotions and campaigns. Although the number of stores is still small, we have digital to enhance the customer experience. As a result, we were able to close the first half with good numbers. 118 was the last year's result, and this year we've had a very high hurdle to overcome, but we were able to achieve 107.2% in the first half of fiscal year 2025, and we would like to keep this momentum in the second half of the financial year.
Now, in terms of the compelling promotions and campaigns, I would like to explain some of the actual initiatives. We are celebrating the 41st year since the founding, and we started to communicate using the slogan "Mastering the Art of Sushi." We once again need to refresh our commitment to sushi, and the freshness of sushi is the focus from sourcing to the actual kitchen cooking. We wanted to tell or communicate to our customers what we are doing in keeping such fresh relay concept. Not only stores, but also processes and fishermen. We involve every stakeholder to uphold and realize this concept. We are a sushi restaurant operator. Our mission is to offer tasty sushi. Once again, we are committed to this concept.
So far, we've focused on sushi-focused campaigns in the past 40 years, but starting in the previous fiscal year, we started some collaboration with various partners to enhance the customer experience in store. Through those campaigns, customers can have more excitement, and we started this initiative again past the fiscal year. In the first half, we've focused on the collaboration with Monster Hunter, which is a popular video game. We were able to attract the Monster Hunter fans, and we offered a good opportunity for them to taste our sushi. By having an enhanced customer experience, we believe we were able to convert them into Sushiro fans. By executing this kind of collaboration, we believe we were able to make some contribution to the first half performance. This is not just a collaboration per se.
In three stores only, we were able to offer a special accent of Monster Hunter, and this was well appreciated by especially young customers and family guests. That is the explanation of the initiatives for Japan Sushiro business.
Next, I would like to go through Kyotaru, Misaki, Sugidama, new brand businesses. My name is Horie. As has been discussed, the takeout Kyotaru brand. For this brand, we have promoted the consolidation of non-performing stores, and we have a new challenge, which is the frozen sushi. This is a very niche area still, so the size of the business is still small, but TV shopping program featured our frozen sushi several times, and Kyotaru's frozen sushi were introduced and distributed through such TV shopping programs. Even if we display our frozen sushi in the regular grocery stores, it is still difficult to attract customers to reach out to our frozen sushi.
When we expose our frozen sushi in TV shopping programs, it seems like customers are showing more interest, and frozen sushi is quite difficult, by the way. Some people are suspicious about the tastiness of frozen sushi. However, Kyotaru has know-how of sushi in the western part of Japan, Kyoto. We were honored with an excellence award at the inaugural Japan National Local Frozen Food Award 2024-2025. In 2022 and 2023, we were awarded some prizes for the tasty frozen sushi, so we would like to continue this. Now, moving on to Misaki brand. Misaki is a rotating sushi brand celebrating 25th or 26th anniversary. Misaki brand is younger than Sushiro, and the direction for Misaki brand is different from Sushiro. We call this gourmet sushi where sushi chefs are actually making the sushi.
Sushiro, the monthly promotional campaign like Sushiro does, and also Misaki brand conducts weekly promotion. As a result, we were able to achieve cumulative revenue for the first half, growing by 5.6% year on year. We have made a nice growth of Misaki brand. Next is Sugidama. Sugidama brand was born in 2017, so now it is eight years old. Finally, in April, we were able to open the 100th store. We offer various sake in Sugidama stores, so our theme is to offer sushi that best matches with sake. Every time we open a new store, this brand is nicely welcomed and appreciated by the customers. We would like to continuously expand the store network.
Next, we have two topics. The left-hand side Misaki brand roadside store. We are experimenting this brand store type. As I have said, Misaki's stores are mostly in commercial facilities or roadside stores close to train stations, and we are testing whether there are potential roadside stores. At Misato, we have opened this experimental store. I'm also responsible for a new model store type, and I was able to develop a new model, which is Tempura Aozora, opened in Noda City in Chiba Prefecture. It has been only one store, so we are not certain yet, but the sales here are at the level that we have planned. When we consider the synergy of procurement, since we procure fresh seafood and good rice, we thought that tempura would be a good synergy. We are hoping that this tempura store will grow to be another pillar alongside Misaki. That is it from my side. Next is on international business.
The numbers were already shared from Yamamoto-san and Yoshida-san, so I believe we were able to communicate to you that the results are very strong. I would like to refrain from speaking too much, so let me just focus on the reasons for the strong performance and the outlook for the second half. The forecast of the full year for FI 2025 is 240 stores approximately. This is a very conservative number, and we are hoping to overshoot this number, but the store contract will usually take six months to one year. From FI 2025 to the first half of FI 2026, in terms of the outlook during that period, the store openings are progressing steadily. For the first half, we set 204 stores in the first half, the actual, and we are now in May after Golden Week, and new openings are progressing.
We were able to open in Suzhou, China, the other day, and the waiting line was eight hours long, so we were able to reconfirm our expansion scenario in mainland China. The Chinese regions, the number of stores are quite robust, and also in Asia, Singapore, and also in Malaysia, where the first store was just opened, the store is accepted favorably by the consumers. For next fiscal year as well, I would like to focus more on new store openings. The biggest factor in support of the strong performance is that the new organization was implemented from October last year, and human resources, education, development, securing necessary personnel, those elements are supporting. The first half of international business, China, is what I would like you to focus on.
On this page, it says external environment, but there were COVID and Alps treated water issues that were headwinds to our business in mainland China business, and we needed to be realistic in tackling that. From the year ending September of 2024, the numbers have been progressing as shown on the graph. It is growing, especially Chengdu, where we struggled. In regions like this, we focused on the Sushiro sushi education to the staff and securing the right people. Those efforts have been supporting our current China business. In the future, we will be expanding more and more stores, and we need to solidify the business foundation. I am happy to report that we are making progress in educating people to support the mainland China expansion. The Suzhou first store opened, and please refer to the pictures shown on the slide as well. These are the photos.
Malaysia first store opened in Malaysia. In the US, it's a brand called Sakabayashi. This is a strategic brand, and this is an experimental trial model store in the US. This is a very strategic base for us, so we have a strong or solid vision for our business in the US as well. In the second half, as was explained earlier, the biggest factor for store expansion is human capital, and also the linkage of the product is also important. We are expanding the areas, and there are already 220 stores. The product linkage is expanding on a global basis, so we need to be efficient. We need to position ourselves as the truly global brand. That is one topic in our international business development.
In order for us to expand the business, the management level human capital development is also necessary, and that we are focusing on a day-to-day basis. I personally am committed to developing the leadership in each region. From next fiscal year onward, I believe your expectations are quite high. From that perspective as well, I would like to surprise you in outperforming the numbers. We want to focus on people development, strengthen the brand across the world, so the results will be reflected in the numbers. That is it from myself. So far was the report on the first half business performance. As I have said in the beginning, in the second half as well, we are scheduled to achieve good full-year results.
Also in the second half, we will make upfront investment on the sanitation or security-related matters and also human capital development, development of a good workplace for people, and also ID-related investments. From this fiscal year, we have set major policy of our organization, which is one company in Japan and overseas, between a store and headquarter, between departments and the headquarter. We are strengthening the alliances or liaison, and the aim is to pursue better customer experience across the world. We have not reached a we do not have an environment that is excellent across the world, but we are to provide the same brand core value both domestically and internationally, including store development, procurement, and marketing. We are to integrate our functions, and also we are focusing on communicating these efforts to external parties.
As was explained in the international market, each market has different cultures and customs, but still, we intend to maintain a consistent brand and consistent service and deliciousness. In order to achieve that, we are focusing on supporting the human capital, and also on a global basis, we need to strengthen our compliance awareness. These are common things that every business has to do, but we are to solidify those areas to operate our business, and we are to build the cultural foundation as one company. In addition to Japan, across the world, we would like to have our Sushiro brand appreciated and accepted by consumers, and I'd like to ask for your continued support. Thank you.
Now we would like to move on to the Q&A session. For those who have a question, please raise your hand. Before you speak up, please state your name and affiliation. Please raise your hand if you have any question.
すいません。 Thank you very much for your presentation. I have a couple of questions. For domestic existing stores, have made strong growth in April, and per store sales is already high. I think it was like JPY 400 million at the end of the year. How sustainable is this strong performance? That's my first question. When you operate this big store, I'm sure you're making the best use of the automated operation, which other companies cannot really mimic. Is there any more room for you to operate the store operation?
Yes, please allow me to respond. For domestic existing stores, yes, we are maintaining a strong performance, and that's been explained today. These numbers are not just temporal numbers. We pay most attention to operation efficiency and the core value of the brand and how we can reflect that concept in our sales activity and the product sourcing. That has been well appreciated by the customers. You are asking the sustainability of this strong performance. My answer is yes, it is sustainable because we have been improving the fundamental operation in the past years. On top of that, as Nii mentioned, Digital is performing well and making steady growth, and new store opening in urban areas has been progressing well. Those factors are making these strong numbers. In terms of the profit improvement by automation, it is rather challenging, but in terms of the margin improvement, when we have more percentage of stores in urban areas, that is positive, and Digital is also making contribution to margin improvement. With those factors, we believe we can still improve the margin.
In terms of the sustainability, are you asking whether we can maintain the current speed of growth or current strong performance? Maybe it will be difficult to maintain the current speed of the growth, but we are now strengthening the brand. We've been focusing on branding. Ultimately, we would like to position our restaurants in a place where people would be willing to wait in a queue because they want to eat so much. If we can realize that concept, then we can maintain good margin. That is also related to your question of sustainability. We can't just rely on a temporary campaign, one-off campaign. In terms of automation, this is a challenging theme for us. The human resource-based business management is quite important, meaning that we need to improve the productivity of our people.
From that perspective, we are contemplating how best we can make use of automation. By offering good education to our people, we can make our stores stronger, and we can maintain the strong performance of our stores. We have a very comprehensive approach.
Kobayashi from Nomura Securities, please.
Thank you for the presentation. I'm Kobayashi from Nomura. I understand that the business performances are stellar. Congratulations. I have two questions. One on domestic, another is on international. This time, the business performance domestically is stronger, and also international is strong, but domestic is very strong. The rice prices in Japan are one of the areas of concern. The revenue is strong, but including the prices of the rice and seafood, how will those prices affect your business performance in the future?
Domestically and internationally, your question covers both. The impact of rice price affects only domestic business, the Japan business impact. I do not have the specific number to share, but we did expect this to happen before this fiscal year started. In the first half and second half throughout the year, we need to be able to manage, and we have developed the structure to do that. The full-year number is now revised upward, and that is the result I can share with you. We are also reviewing constantly the menu mix. The COGS is being strictly controlled in such a way on a consolidated basis. When we look at the impact, more than 30% of the profit comes from international business. Although there is impact, it is not a very significant impact. We are able to manage and control the situation. Thank you very much. The second point is on international market, China.
Mainland China recovery. I'm relieved to hear that you were able to recover in mainland China. The existing stores that you shared in Guangzhou last year, the revenue decreased. Compared to the rate of revenue increase this year, if you compare the result with two years ago, you have grown, but you have strengthened the organization and the human capital development. That improves the operation, but more fundamentally in the local market is the Sushiro brand established as a firm brand. In addition to Guangzhou, in other regions in China, is the brand resonating? You are exactly right. I thought that you are part of the company who is answering to a question. I wondered when I talked about what you said, but you are exactly correct.
Urban style and also suburban style or region style, wherever style may be, there are variances in price range and menu mix. Beijing is not included here, but in China, the biggest brand expansion was the media exposure at the Beijing store opening. People recognize that Chinese consumers recognized that this is a sushi store that is so popular in Beijing, and there was a word-of-mouth spread. It was expanded in Shenzhen, Guangzhou, and now in Chengdu. Now we are expanding to Suzhou. We develop people, we develop products, and we develop brands. From that perspective, we now have more than 50 stores in China, and we are going to accelerate further in the next fiscal year. That is the stage we are in in China. Thank you for your comment. それでは。
Next, the gentleman from Goldman Sachs.
My name is Kavanagh from Goldman Sachs. I have two questions. The first question is related to domestic business, and the second one is related to international business. For domestic business, the customers turn over when you think about it. You made a nice growth so far. Is there any more room for you to grow the performance of the stores, which is already in a very good condition? You also talked about the price, the rice. In the first half, it was okay. In the second half, I think you've already factored in that further deterioration and COGS is set almost afloat. In next fiscal year, you will be impacted by the rice price change on a full-year basis. Should we think about some negative impact from that? My second question is related to international business.
In China, not Japanese sushi chain, but local low-price sushi restaurants, how do you see their sales performance? What is the current status? Also in shopping, I heard that some of the tenants have left shopping centers. Because you are doing so good, the shopping center operators may have approached you to offer some space to open your stores. Would that be the case?
With regard to your first question, there are several points that I would like to comment. There are some things that we can do. For example, we can implement repeat customer acquisition activities, and we can focus on such promotion. Not in the existing store side of business, but we are going to accelerate the new store openings, especially in regional or urban area. We believe we can also further grow our performance.
Also in suburban areas as well, we are opening new stores. It's not like we're opening new stores only in urban areas. In terms of the COGS, rice price will have some impact, but we control COGS at a certain level normally. Such management style does not allow for a dramatic deterioration, but the rice price will be negotiated for the next fiscal year. Menu mix will be one of the areas that we will look into for the second half. In terms of the potential for further growth, when you look at the number of customers compared to before COVID, revenue is already exceeding. However, the number of traffic or customers is not coming back to pre-COVID level yet. It's quite important to convince customers to even wait in a queue to enjoy our sushi.
It is all about how we can enhance our customer experience in the stores. The home delivery business style is becoming more and more difficult. Eat in, take out, have different experience. What is the value of takeout? If we can enhance that, that will push or drive further growth. We still believe in the future potential growth. In terms of COGS management, as Yamamoto mentioned, pay for the experience is quite important. If a customer has a very good experience and ended up paying less than their expectation, then we can convince those customers to keep coming. Customer experience really matters, and that customer experience is consistent of our customer service level and also sales mix. Human capital-based management is quite important here. Employee education is something we need to continue.
For international business, was there room for a new store opening? In China, some shopping malls are struggling after COVID-19, after Alper's treated water issue. Chinese people do have passion for food. However, their selection criteria seems to be changing over the past years. We need to study what kind of food is well appreciated and should be reflected into the product development and room for a new store opening. Unfortunately, we are approached by so many shopping mall operators, and I think that's the testimony of the enhanced brand power. Across the entire mainland of China, we receive a lot of approach. Competitor brands, local brands, there are so many sushi chain brands in China, but that's good because new entrants will activate the sushi market. When customers come to our stores, as a result, we can please them with good sushi. We would like to just do our best to activate the sushi market together with the industry peers.
ありがとうございます。 Thank you very much. Next question.
I'm Kasahaya from UBS Securities. I have two questions. I would like to reconfirm the numbers. This time, revenue and operating profit. The operating profit was revised upward by JPY 6.5 billion. In the first half, actually, there was no budget. This update, was it a reflection of the outperformance of the first half, or what are the changes or other assumptions that you have made?
Basic concept is that first half, we outperformed the plan. That is reflected in the second half. That is the basis. Within that, we discussed about rice price. Those are the assumptions we did not have in the beginning of the fiscal year. Those are factored in as a result. The sale revenue of JPY 460 billion and operating profit of JPY 32.5 billion is the numbers that we are disclosing now. Let me add, for international business, FX rate has been updated, and that is partially factored in. The current spot rate, so you have revised the FX rate to a more conservative rate in line with the current spot rate.
My second question is more of a qualitative question. Looking at the conversation by the top management of the Q&A session, I think you have become very transparent within the team, and I feel that the leadership team is integrated and focused on the same goals. After Yamamoto-san assumed the role of CEO, the cohesiveness of the team has improved. What did you have in mind to achieve that? Next fiscal year is the final year of the current midterm plan. Towards next fiscal year and beyond, what are your focuses in developing your leadership team?
Thank you for the question. The comparison of the past and today, that is very difficult to comment from myself, but can I talk about what we are working on right now? For that, as shown on the screen, let me talk about the assumption. First is the. It's not just the members present here, but the leadership team's communication is very dense now. This is quite a common thing for a company to do. The headquarter, within the headquarter, there are members of the functions in departments, and almost all people are located in the same headquarter, and good communication is taking place, and there is an open environment, and we are to create a fearless environment.
A leadership team is taking the lead one layer below or two layers below, so-called educational or enlightenment activities are being done. That is how we work. So-called organizational behavior is our focus, and between different departments, we try to remove the silo, and we take the lead in becoming the role model. That is a major point. Food & Life Companies originally have this sincerity and judgment as a professional. In addition, we are to improve the interdepartmental communication with respect to each other. That is the steady effort. Also, in the past two years, we are working on Japan domestic business as well, and we are to solidify the foundation first before deploying the sales promotion.
We have set the priorities straight, and we are steadily working on these measures, and that generated results, and that created the confidence among the members of the staff. This virtuous cycle has been created. It is thanks to these members of the leadership team that are working together with me that I think we are doing well. I'm not sure this answered your question. I have nothing to hide.
Thank you very much. I have a similar question. When you think about team members, part-timers are the ones who are directly serving customers. I had a very good experience interacting with your staff in the store. The restaurant industry is struggling in shortage of workforce, but now you are opening new stores. Based on the media, it seems like part-timers were about to go on strike asking for increased wages.
My question is, how are you going to brush up the part-timers and the staff who are directly interacting with your customers? That is my first question. My second question is related to FX. Depending on the FX assumption, the FX gain and loss may be changed. I think it will also affect the sourcing price that you source outside of Japan. How should I think about the FX impact on your business?
From a COGS management perspective, I think the impact may be different. Also, depending on the overseas business contribution, the FX impact may be different. In terms of the staff education for Japan operation, now we have this big business, but we did not have a good established education system. We let store managers handle the education of their staff. Those store managers are managed by area managers.
We are very much just depending on each person. Three years ago, we set up the team dedicated to staff education. This team is now offering good education to the employees. Recently, we are starting education to the store staff. We learn from other major food chain operators. Also, in terms of the performance assessment, we place focus on the people development. It is not like whether or not these managers are listening to the orders or instructions coming from the headquarters. We give some autonomy to the store managers to do the staff education. I would say like 50% education system coming from headquarters and 50% led by store manager. Now, our business size is quite big, so it will take some time to completely roll out the systematized education system. Maybe it will take like three, four years.
People education, people development has been the focus in international business as well and will be the focus. We respect people, and this culture needs to be well embedded in the entire company. It may take some time, but we would like to make steady progress. To your second question, FX impact in sourcing activity. We have only 10% foreign currency-denominated transaction right now. Basically, the majority of the transaction is done in Japanese yen. FX is not posing as a big impact in a timely manner. Overseas sales is the only one which is directly hit by the FX movement. 10%, you said. Is 10% of the direct cost? 10% of overall cost? Close to 10%? Less than 10%? The foreign currency-denominated PL in overseas operation, when we take them in, of course, we will be impacted by the FX.
Currently, we are expanding the geographic coverage, meaning that we are not influenced by one single foreign currency. That is giving us better risk hedge. The top line will be hit, but the profit is not going to be impacted as much. That is the assumption for this time's forecast revision.
Thank you very much for raising a lot of questions. It is time. With this, I would like to close the Q&A session. Now, I would like to close the briefing session by Food & Life Companies for the FI25 first half financial results.