2908.T

Operational & Strategic Highlights

• First Half 2025 Key Milestones:

  • Implemented product price hikes in March 2025; restructured internal organization in April to strengthen R&D capacity.
  • Published the 2025-2027 mid-term management plan in May, and approved the closure of Hamasaka Factory scheduled for March 2027 to improve operational efficiency via facility consolidation.
  • Absorbed and merged Fujicco New Delica Co., Ltd. in July, and completed the divestment of Foods Palette (a Chinese side dish producer) in August to streamline the side dish business.
  • Acquired Thailand-based FB Food Service (annual sales ~2 billion yen, focused on Japanese-style side dishes) in September; launched new product Richmo in the Caspian Sea Yogurt line.

• Growth Strategy & Product Development:

  • Core R&D principle: Continuously refresh, renew, and rebrand existing product lines while investing in technical innovation and new product development, with a focus on developing products tailored to segmented customer needs.
  • Recent new product launches: Reduced-salt kelp tsukudani (under the Fujicco Boiled MIRAI series, using frozen raw kelp to support producers), trial-size salted kelp for new consumers (using Chinese-sourced kelb to offset domestic supply constraints), and the new Caspian Sea Yogurt Richmo, a thick, rich-textured yogurt with a hygienic screw cap that has received strong positive early consumer feedback.
  • Yogurt category growth: Positioned as the company's third core growth pillar, with plans to expand the Richmo line into a full product series. The business is celebrating its 20th anniversary, and is expanding to international markets, including a recently launched honey-yuzu plant-based Caspian Sea Yogurt in Taiwan (currently undergoing adjustment due to higher-than-target pricing) and sweetened plain yogurt sold via ~10 retail outlets in Indonesia, which is popular with Japanese consumers.
  • Soy product development: The 100% soy-based Daizu Rice product line was updated with microwavable cup variants, improved flavor that significantly reduced beany aftertaste, and additional flavored options (such as gapao) to improve accessibility.

• Business Portfolio Optimization:

  • Classifies the portfolio by growth potential: Yogurt (star category) will pursue global expansion and open to M&A opportunities; the underperforming dessert category is under strategic review (to decide between retaining, divesting, or reallocating resources); the bean business, which is at risk of becoming an underperforming unit, will be refocused on high-potential boiled/steamed bean segments to turn it into a cash cow; side dish/delicatessen and e-commerce (question mark categories) will be accelerated to become star categories; overseas business (growth seed) will pursue continued expansion.

• Efficiency Improvement & Corporate Purpose:

  • Combines DX (digital transformation) with the FCR (creative business innovation) movement to cut costs and drive innovation, integrating both initiatives as core efficiency efforts.
  • Long-term mission: Promote a "New Japanese-style Diet" focused on supporting gut health and long-term intestinal flora, with the goal of expanding the benefits of soy, seaweed, and yogurt globally to support a healthy, long-living society.

• Key Mid-term Priorities: 1) Further business portfolio restructuring; 2) Grow yogurt into the company's third core pillar; 3) Scale up Southeast Asian-based overseas business; 4) Develop and execute the factory consolidation plan.

• Full year FY2026 (ending March 2026) consolidated sales guidance is 56.6 billion yen, a 0.8% decrease year-over-year, primarily due to the divestment of Foods Palette.
• Full year operating profit guidance is 16.5 billion yen, a 45.9% increase year-over-year, driven by price hike benefits and fixed cost reduction efforts that offset higher raw material, labor, and logistics costs.
• Full year recurring profit guidance is 19 billion yen (+22.2% YoY), and net income guidance is 13.5 billion yen (+41.8% YoY).
• Annual dividend per share guidance is maintained at 46 yen.
• Full year capital expenditure guidance is 3.5 billion yen, including investments in new production equipment for Richmo at the Hokkaido factory and increased production capacity for the growing Marugoto SOY Caspian Sea Yogurt line. Full year depreciation guidance is 3.5 billion yen.
• For the full year, management forecasts a 551 million yen increase in bean product sales and a 400 million yen increase in yogurt product sales (driven by Richmo), offset by a 1.179 billion yen decrease in side dish sales from the Foods Palette divestment.
• Downside risks to full year sales: Interim sales were 3% below the initial forecast, with bean products missing targets by ~500 million yen (coming in at 89.9% of the initial forecast), but management expects to recover this shortfall in the year-end holiday/osechi selling season.

For the April-September 2025 interim period, total consolidated net sales were 27.745 billion yen, a 1.1% decrease year-over-year. By product segment: 1. Kelp products: Net sales increased year-over-year. After a temporary volume decline following spring 2025 price hikes, sales recovered to positive growth. 2. Yogurt products: Net sales increased year-over-year, driven by strong growth of soy yogurt products. 3. Side dish products: Reported net sales decreased year-over-year, driven by the exclusion of ¥~10 billion in sales from Foods Palette, which was divested in August 2025. Excluding the divested business, existing side dish product sales grew year-over-year. 4. Bean products: Net sales came in at 97.9% of last year's level (a 2.1% YoY decrease), as growth of the single-serve cup

• Kelp supply is facing growing long-term risks of depletion and production decline, though management notes there is still remaining quota available for imports from China and Russia, which can be utilized to stabilize supply.
• The bean business has underperformed initial growth plans in the first half, missing the aggressive forecast target set for the second year of the business revitalization effort, with overall sales down slightly year-over-year.
• Spring 2025 price hikes led to temporary volume declines across multiple product categories, with dessert products seeing a larger-than-expected volume drop, and overall first half sales coming in 3% below the initial company forecast.
• The newly launched Caspian Sea Yogurt Richmo still has low consumer awareness and incomplete distribution across all retail stores as of the end of the first half.
• The Taiwan launch of plant-based Caspian Sea Yogurt has underperformed early expectations due to higher-than-optimal pricing, requiring product adjustments before re-launch.

No formal question and answer section was included in the provided transcript.