2700.T

• 2025 Full-Year Consolidated Financial Results • Consolidated net sales reached 176.191 billion yen, up 48.1% year-over-year; operating profit reached 8.025 billion yen; ordinary profit reached 8.169 billion yen; net profit attributable to parent company shareholders reached 5.52 billion yen, up 220.4% year-over-year. All profit metrics hit record all-time highs. • Balance sheet: Total assets increased by 16.443 billion yen from the prior year-end to 56.612 billion yen, driven by rising rice unit prices that increased current assets (including inventory and accounts receivable). Current liabilities increased by 10.7 billion yen, mostly from higher short-term borrowing to fund increased rice purchase costs. Net equity increased by 5.474 billion yen to 21.034 billion yen. Equity ratio fell 1.3 percentage points to 36.1%, and net assets per share (adjusted for July 2025 stock split) increased 661 yen to 2,498 yen.

• Review of Previous Mid-Term Management Plan • The prior plan focused on "system restructuring", with three core pillars: expanding rice business, growing rice-related business, and building a foundation for corporate growth. • Achieved progress: strengthened sales force via integration of rice and food segments, enhanced procurement base using weather-resistant high-yield rice, expanded sales of products using the new UMBP non-wash rice processing technology, grew chicken egg and overseas business, expanded eco-friendly product sales to advance SDGs-aligned initiatives, and improved operational efficiency and human capital management. • Unresolved remaining challenges: overseas market development, reducing reliance on the core rice business, and talent acquisition. The prior plan is positioned as a successful preparation period for the next growth phase.

• Current Environmental Context and Problem Recognition • The rice industry is in a period of major structural change following the "Reiwa Rice Riots" (2020s rice shortage crisis). Price formation has shifted from demand-led (consumer demand driven) to a market heavily influenced by producer-side factors due to persistent supply constraints. • Medium/long-term challenges include declining rice consumption from population reduction, producer aging and farm exit, rising logistics costs, and climate change risk. Management recognizes that the traditional business model has limited growth potential, so evolution of the business portfolio centered on securing procurement capacity, expanding rice consumption, and scaling rice-related business is required.

• Core Mid-Term (2026-2028) Growth Strategies • 1. Securing Procurement Capacity (top priority): Set a long-term 2040 target of 10% domestic rice procurement market share. Key initiatives include deepening existing transactions with Zen-Noh (National Federation of Agricultural Cooperative Associations), expanding direct transactions with agricultural cooperatives, strengthening long-term partnerships with producers, exploring upstream engagement via collaboration with or participation in production corporations, pursuing M&A of small and medium-sized regional rice wholesalers to expand procurement areas and improve logistics efficiency, investing in next-generation rice milling facilities to increase production capacity, stabilize quality, reduce labor needs, and improve operational efficiency. For overseas business (a key growth area), target 50,000 tons of overseas sales volume by 2028 via expanding trading country and flow scale, and integrate domestic and overseas procurement/supply to build a resilient system less vulnerable to market changes. • 2. Expanding Rice Consumption: Shift the product portfolio from private brand (PB) focused to national brand (NB) focused, fully refresh NB products, strengthen marketing to improve consumer appeal and differentiation, enhance blended rice offerings to balance cost competitiveness and taste matching customer demand. Target 40% NB sales share by 2028. Strengthen health-focused consumer outreach, continue support for school lunches and children's cafeterias to expand exposure to rice, build long-term consumption environment and food education to sustain rice as a core staple in Japanese food culture. • 3. Scaling Rice-Related Business: Expand the feed and chicken egg businesses (which have high synergy with the core rice business, leveraging existing procurement, logistics, and sales networks) to reduce earnings volatility from rice price/supply fluctuations. Target 1.5x handling volume for the feed business (via M&A of peers to scale and improve logistics efficiency, plus product development using in-house resources like rice bran to improve profitability) and 2x scale for the chicken egg business (expand from the Tokyo metropolitan area to Western Japan, via collaboration/M&A with integrated production/sales firms to scale and build stable supply). Commercialize unused resources such as rice washing byproduct water as a circular business that balances environmental compliance and profitability.

• Management Foundation Strengthening • Organizational: Newly established a Development Division to lead new business launch and post-M&A growth, add cross-departmental growth governance to the existing division system to improve speed and accuracy of strategy execution. • Human Resources: Prioritize hiring and training of specialized, proactive talent that can drive business portfolio transformation and growth investment, to build a thick core team capable of executing strategy. • Digital Transformation (DX): Prepare for core system renewal to enable data-driven fast decision making and operational efficiency, position DX as a foundation to maximize the capability of people and organizations to improve overall management execution.

• Financial Strategy and Shareholder Return • Three core financial pillars: grow sales and operating profit via business expansion, actively pursue investment for future growth, deliver sustained shareholder return based on growth results. • Cash allocation: Allocate operating cash flow generated during the mid-term plan period (after maintaining financial health) to three categories: growth investment (procurement strengthening, M&A for rice-related business expansion, next-generation rice mill investment), renewal capex for existing business, and shareholder return. • Shareholder return policy: Prioritize sustained stable dividends balanced with growth investment and financial health. Adopt a target of 2%+ return on equity (DOE) on a consolidated basis as a guide for dividend levels, to avoid excessive sensitivity to short-term earnings volatility and deliver stable medium/long-term return. Actual dividend levels will be determined considering business environment, investment plans, and financial conditions.

• 2026 (Fiscal 79, December year-end) Consolidated Guidance: Net sales is projected at 200 billion yen (an increase from 2025's 176.191 billion yen). Operating profit and ordinary profit are both projected at 4 billion yen, and net profit is projected at 3 billion yen. Management incorporates a reactionary pullback from 2025's exceptionally strong results into this guidance, and prioritizes strengthening earnings structure and laying groundwork for future growth over short-term profit maximization given high market uncertainty.
• Mid-Term (2026-2028) Financial Targets: 2027 (Fiscal 80) targets operating profit of 5 billion yen. 2028 (Fiscal 81, final mid-term year) targets net sales of 250 billion yen and operating profit of 6 billion yen. The 2026 targets align with the annual mid-term plan targets outlined above.
• Long-Term Growth Targets: Position the 2026-2028 mid-term plan as the first step toward the long-term vision of becoming a rice food infrastructure enterprise. Target 10% domestic rice procurement market share by 2040, with the 150th founding anniversary in 2032 as an intermediate milestone.

1. 米穀事業: This is the core business segment that drove overall profit growth in 2025. Sales increased significantly driven by surging rice prices (due to domestic rice shortage), increased sales volume of 447,000 tons (an increase of 89,000 tons year-over-year, from higher minimum access rice trading and the addition of government reserve rice distribution starting late March 2025). The business successfully passed rising purchase cost increases to selling prices at appropriate timing while prioritizing stable supply, leading to strong net growth. Domestic consumer packaged polished rice performed steadily, while brown rice sales declined due to raw material shortages. No explicit standalone absolute financial value or revenue contribution percentage was provided in the transcript. 2. Food Segment: The segment reported a year-over-year decline in operating profit. This decline was attributed to delayed response to raw material price inflation. No explicit standalone absolute financial value or revenue contribution percentage was provided in the transcript.

• Current market risk: After the 2025 rice price surge, 2026 is expected to see easing supply demand from increased 2025 (Reiwa 7) harvest volume, large releases of government reserve rice, and record high imported rice volumes. However, intense collection competition has locked in high purchase prices, leading to sticky high selling prices. This has weakened consumer purchasing appetite, reduced distribution buying interest, and caused falling volumes and prices in the spot market, leading to continued difficulty forecasting supply demand and prices.
• Inventory accumulation risk: A gradual decline in edible rice demand is projected for 2026. Sales volumes for both food service and household use are on a declining trend, and sales from collectors to wholesalers hit a record low for the month of December. As a result, private inventory at the end of June 2026 is projected to increase year-over-year, creating inventory accumulation risk.
• Structural industry risk: Long-term industry risks include declining rice consumption driven by population reduction, producer aging and increasing farm exit, rising logistics costs, and growing climate change disruption risk. The traditional business model is recognized to have limited stable growth potential without structural transformation.
• Unresolved legacy challenges: From the previous mid-term plan, challenges remain in overseas market development, reducing reliance on the core rice business, and securing sufficient skilled talent to support growth.

No live question and answer session was included in the provided transcript. Management notes that any questions or comments can be submitted via the company's official website.