KUZE CO.,LTD. Q4 FY2025 earnings call

New Corporate Philosophy for 100th Anniversary

• Developed a new mission: "Connecting thoughts through the power of food", reflecting the company's role as an intermediate distributor linking producers, manufacturers, logistics partners, food service clients, and end consumers
• New vision: "A world where people connect through food and hearts are fulfilled", aiming to contribute to rebuilding human connection amid digital-driven social fragmentation
• Three core values: 1) Deliver unexpected delight, 2) Lead the times and create new value, 3) Deliver accurately and efficiently
• Long-term management theme set as "Sustainable, high-quality growth" as the company approaches its 100th anniversary

Completed Phase 1 of Mid-Term Management Plan

• Phase 1 was themed "Restart for Growth", focused on rebuilding the business foundation with three core strategies:
  1. Kanto concentration: Concentrate resources and deepen local presence in the company's historic core Kanto region
  2. Function enhancement: Expand value-added services including the KUZEX digital platform and EC logistics outsourcing
  3. Plus-on strategy: Offer value-added products and services to help clients solve challenges including value growth, profit improvement, and labor shortages
• Priority growth markets: Food service, tourism and leisure, and ready-to-eat side dishes, to accumulate cross-market expertise and strengthen client relationships
• Achieved the mid-term target of 2%+ operating margin; Phase 2 of the mid-term plan is currently under development and will be announced in due course

FY2025 (ended March 2025) Operational Achievements

• Opened a new logistics center, expanding logistics capacity to support future sales growth and drive new customer acquisition, though the new facility increased near-term SG&A expenses
• Drove new customer development centered on Kanto and the three priority markets, generating 1.574 billion yen in new customer revenue
• Advanced digital transformation (DX): Grew KUZEX platform users by 36% from September 2024 to March 2025, and launched the proprietary Smart Connect platform to digitize sales activities
• Strengthened competitive product lines: Launched 16 new private-label products under the Meikit and Dolceze brands; group subsidiary Kiseko Foods expanded high value-added new products, and Asahi Suisan grew export sales to Asia and North America
• Strengthened alliances: Deepened partnership with Kokubu Group Headquarters for China operations and alcohol business to drive new growth
• Improved balance sheet: Repaid 2 billion yen in subordinated debt from the COVID-19 period, reduced interest-bearing debt by 60.9% year-over-year to 1.784 billion yen, and raised equity ratio from 26.8% to 34.5% to repair pandemic-damaged financial health

The provided transcript does not break out financial performance by individual product segments. It only reports aggregate consolidated full-year results: consolidated net sales of 68.568 billion yen (up 6.4% year-over-year), gross profit of 15.723 billion yen, selling, general and administrative expenses (SG&A) of 13.876 billion yen, operating profit of 1.847 billion yen (down 0.8% year-over-year), ordinary profit of 2.191 billion yen (up 13% year-over-year), and net profit attributable to parent company shareholders of 1.754 billion yen (down year-over-year due to elimination of loss carryforwards and higher corporate taxes). New customer development revenue across core target markets totaled 1.574 billion yen for the fiscal year.

• For FY2026 (ending March 2026), management forecasts consolidated net sales of 71 billion yen, operating profit of 1.92 billion yen, ordinary profit of 1.95 billion yen, and net profit attributable to parent company shareholders of 1.25 billion yen. Lower ordinary and net profit compared to FY2025 reflect the absence of the prior year's foreign exchange gains from the partial stake sale of Chinese group subsidiaries, with a projected ordinary profit margin of 2.7% down from 3.2% in FY2025.
• Management will prioritize improving the current volatile logistics environment, leveraging the expanded capacity of the new logistics center to deepen relationships with existing clients and accelerate new customer acquisition.
• For shareholder returns: FY2025 will pay a total dividend of 42 yen per share (15 yen ordinary + 27 yen special). For FY2026, the two-tier ordinary/special dividend framework will be consolidated into a single ordinary dividend targeting a payout ratio of 10% to 15%, with a planned total dividend of 42 yen per share unchanged from FY2025.
• FY2026 core operational priorities include: continuing to concentrate resources on the Kanto region and deepen local presence to accelerate new customer development; rolling out the Smart Connect customer data platform to drive DX for sales operations; building a new product database to strengthen marketing and supplier collaboration; continuing to grow logistics outsourcing and EC business, cooperate with major platform providers, and launch a new proprietary EC website; optimizing the logistics network through a dedicated strategic project, and testing material handling automation to improve warehouse accuracy and efficiency; and investing in employee wellbeing through base pay increases, diverse work arrangements, and expanded health and welfare benefits.

• Macroeconomic risks: Persistent inflation, widening economic inequality, and uncertainty from U.S. tariff policy have left the overall economic outlook unclear
• Industry challenges: The out-of-home and ready-to-eat food market is seeing a mix of selective consumption and consumer cost-saving sentiment, while ongoing rising costs for raw materials, logistics, and labor, combined with deepening labor shortages, create ongoing margin pressure
• Near-term profit pressure: Costs from the newly opened logistics center will continue to weigh on profitability in FY2026, requiring active cost management and operational improvement to offset higher expenses

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